Soccer Hype

Major League Soccer (MLS) and the MLS Player’s Union (MLSPU) are in the middle of negotiations for a new collective bargaining agreement (CBA).  The old deal ends on January 31, 2010, but little has been decided or agreed upon at this time.  Owners and players alike are beginning to get nervous that a new agreement will not be created by the January deadline.  Could a player’s strike be in the mix for the 2010-11 MLS season?  

The main areas of debate for the new CBA negotiations are roster protection and player contracts, the minimum player salary and each team’s salary cap and the MLS’s lack of an internal transfer market.

Is the MLS in compliance with FIFA regulations regarding the status and transfer of players?  Don Garber, MLS Commissioner, says yes.  Bob Foose, Executive Director of the MLSPU, says no.  Who is correct?

In all actuality, both individuals are somewhat correct.  The current CBA stands up on paper, but it certainly goes against the intent of FIFA regulations.  According to article 13 of the FIFA Regulations on the Status and Transfer of Players, “[a] contract between a professional and a club may only be terminated upon expiry of the term of the contract or by mutual agreement.”  In other words, the MLS is supposed to respect the nature of a contractual agreement.  Article 16 of the very same document creates vivid guidelines for the minimum length of these contractual agreements: “a contract cannot be unilaterally terminated during the course of the season.”  

According to FIFA, leagues have two very simple rules to follow.  One, respect the nature of a contract.  Two, the contract must last at least one season.  One would think the MLS should find it quite easy to respect these rules, but a look at the typical MLS player contract proves otherwise.

Most players in the MLS have contracts that are one-year long and semi-guaranteed as part of a series of league held options.  However, the MLS reserves the right to nullify a deal prior to the conclusion of the terms of the contract and the conclusion of the season in which the contract was written.

The typical MLS player contract appears to be in direct violation of FIFA regulations, right?  Well, not exactly, because Article 1.2(b) on the FIFA Regulations on the Status and Transfer of players provides the MLS with some wiggle room.  Article 1.2(b) states, “[e]ach association shall include in its regulations appropriate means to protect contractual stability, paying due respect to mandatory national law and collective bargaining agreements.  In particular....the principle that contracts may be terminated by either party without consequences where there is just cause.”

In other words, the MLS may terminate a player’s contract in the middle of the season as long as there is “just cause.”  Now, how one interprets “just cause” is, well, a matter of interpretation.

According to section 18.7(i) of the current MLS CBA, the league interprets “just cause” as a failure to “exhibit sufficient skill or competitive ability to qualify for or continue as a member of the team’s active roster.”

Basically, according to Article 1.2(b), the MLS has the right to terminate a contract if a player does not “exhibit sufficient skill or competitive ability” regardless of the nature or duration of the player’s contract.

It appears that the MLSPU has good reason to gripe about the league’s current rules regarding roster protection and player contracts, but what about the minimum player salary and the league-wide salary cap?

The current CBA places the minimum player salary at $34,000 and the league’s salary cap at $2.3M.  Obviously, $34,000 is a pittance when compared to the minimum salaries of other American leagues: the NFL, NBA, NHL, MLB, etc.  However, the MLS serves a much smaller market, so do the players really have a right to complain?

Since the current CBA was created in 2004, the MLS has collected over $200M in expansion money and $17M from television deals.  Additionally, Garber alone makes $1.25M annually, which is potentially more than an entire MLS team of players collectively. 

However, it is important to note that the MLS has a history of financial losses in spite of the former positive fiscal figures.  According to information gathered from the MLSPU’s lawsuit in the 1990’s, the MLS lost approximately $30M annually during the league’s first five years.

Given all this information, it appears that both the MLSPU and the MLS have significant reasons to be upset at the proposals coming from the other end of the negations table.  Yet, a compromise must be reached.  The question is which demand(s) is the MLSPU willing to let go?

In the MLS, players’ contracts are owned by the league, not the individual team for which a player plays.  This means that upon the expiration of a player’s contract, he does not go into free agency where he would have the right to negotiate his own contract with any team that was interested, thus, typically, earning him more money.  Since the league owns all player contracts, the league has the right to renegotiate a given player’s contract with or without that player’s consent.  This new contract will, most likely, not be in the player’s best interest and will certainly not earn the player significantly more money, since that would not be in the best interest of the fiscally focused league.

In my opinion, the MLSPU should probably concede this final point in negotiations.  Yes, the MLS is the only American league that does not have free agency, but it is also one of the most fiscally sound leagues in the U.S.  The MLS’s fiscal abilities are what has allowed it to thrive for over a decade in a rather small market.

When negotiating, compromises must be made and while the MLSPU has some significant reasons to be upset with the MLS, it has to conceded somewhere, so why not the free agency issue?  

Regardless of what issues are compromised by the MLSPU, something must be decided by the end of January, otherwise a player’s strike could be in the mix.  Garber has assured the public that it is much too early to speak of or consider a strike situation, but the MLSPU has made different claims.

In an October 28, 2009 article in the Toronto Sun, Nick Garcia, defender for Toronto FC and member of the MLSPU committee, implied that a strike was possible.  “We don’t want to strike,” Garcia said.  “But, we’re the only league in the world where players are not on guaranteed contracts.”

Although many other player’s unions have gone on strike successfully to obtain their demands, the MLS is simply too small of a league to withstand a work stoppage.  At a time where American interest in soccer is finally on the rise, a strike in the top men’s professional soccer league in the U.S. would be a fatal blow to the sport’s popularity in America as well as the league itself.

FIFA has stated that it will not interfere in MLS CBA negotiations, as it is a domestic issue, so it appears that the MLSPU is on its own.  Hopefully, a fair compromise can be reach by both the league and the union before January, because the alternative would not only be disastrous for both parties involved, but also for the soccer-loving American public. 

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