Strike Now A Real Possibility

January 22, 2015

At the beginning of the year, I was hopeful that the MLSPU and MLS could agree on a new contract, but now I am very fearful this will not come to pass and we are headed for a strike to begin the season.

MLS began by creating an “even” playing field for teams in order to grow its fan-base.  All teams had an equal amount of money to use (salary cap), contracts had salary maximums allowed by the league, as well as minimums, and these contracts were usually renewed at the end of each year (hence no “long term” contracts).  The goal was to use lower salaries to establish team competition, ensuring that big market teams that could afford huge salaries were not beating up on small market teams.  Everyone had a fair chance at winning, which would help grow the league’s fan-base in smaller markets.  There was also very little risk for team owners to lose money, hence allowing for new franchises and an even larger MLS fan-base.

One of the drawbacks to this system was the lack of interest in quality players playing in MLS.  There was not a lot of money to be made, and the lack of long-term deals raised questions about player stability–if a player had a bad year, he may have to go shop himself to another team!  As a result, the best players all went abroad to play for more money and longer contracts.  Mediocre play by mediocre players did not attract the throngs of fans the MLS wanted by ensuring an “even” playing field.

Then in 2007, David Beckham happened.  The league introduced “restricted free agency” via the Designated Player system.  Designated Player contracts fall outside of league rules regarding contracts.  When first introduced, the first $400k of a DP contract counted against the cap, but the rest of the money was free to spend on player himself.  Thus players signed as Designated Players could sign long-term deals worth big money while teams could continue to restrict the salaries of all other players (Beckham signed for 5 years, $32.5 million).  This seemed to solve some of the problems with restricted salaries as seen with the recent rise of big-name international players in MLS.  Since the institution of the “David Beckham” rule in 2007, there have been eleven new expansion teams which were added, or will be added, to the league: Toronto, San Jose, Seattle, Philadelphia, Vancouver, Portland, Montreal, NYCFC, Orlando, Atlanta in 2017, and Los Angeles in 2017 to replace Chivas.  Miami is still pending approval, and other markets like Sacramento and San Antonio are in consideration.  Designated players like Thierry Henry, David Beckham, Landon Donovan, Robbie Keane, Clint Dempsey, and others have brought a higher quality of play to the MLS, more franchises, and more fans.

Yet there were drawbacks to the restricted free agency of the Designated Player system.  The league seemed to be inconsistent in its awarding of DP contracts.  L.A. Galaxy had no less than FOUR DP contracts (Omar Gonzalez, Landon Donovan, Robbie Keane, and David Beckham) a few years ago, and has won the MLS Cup three times in the past four years.  Designated players did away with the “even” playing field and salary structure with which the MLS began.  So why not allow for unrestricted free agency instead of allowing just a few teams to prosper from the DP system?

I read a great article as to why the league SHOULD use free agency.  The gist: if the MLS wants to be a force in international soccer, it has to attract players via salary competition, something the current system restricts.  The increase of quality players would be a financial boon for teams, potentially letting them grow into powerhouse organizations like their European rivals.  Bigger salaries equal better teams, more fans, and most importantly a successful league.

Yes, free agency will attract players to the MLS, but as we have seen from European leagues, it creates an imbalance within the league.  Huge-market teams like ManU, Barcalona, Bayern Munich, etc. all sit at the top of their respective leagues year after year because other teams cannot compete with their payrolls and the caliber of players they can afford.  This is something MLS wants to avoid.

Also, and more importantly, the MLS has every right to be cautious.  Free agency is a HUGE risk for owners, as free agency was the cause for the collapse of the NASL in the 1980s.  Teams were paying large sums of money for players, yet at some point, the teams had reached their fan, and revenue, threshold.  The teams had to pay these large contracts without the anticipated revenue from the contracts, the owners lost money, the teams folded, and eventually the NASL shut down in 1984 despite a huge surge of popularity in the 1970s thanks to free agency.  With the advent of free agency in the MLS, we may have a repeat of the NASL 30 years ago.

Michael Bradley said that free agency is worth a player strike (he can afford it, whereas many players cannot), and his views are certainly shared by other players.  Many MLS players make less than $50K/year, and a few players who deserve to make more are capped at $385k/year.  Keeping this system over free agency could be a deal-breaker.

I really do not think the MLS will offer unrestricted free agency, and it sounds like the players won’t vote for anything less.  The risks outweigh the rewards for owners, yet players clearly want free agency as it’s in their own best interest financially.  Until that gets settled, we may have to wait for the beginning of the season.

My bet: the season will start, but not on time.  The key lies in the fact that many players are relying on that MLS paycheck, and a strike would put those players in a precarious situation.  In MLB and the NHL, the players can afford a strike.  In MLS, a strike favors the league more than the players themselves, hence why I am cautiously optimistic about 2015 starting sooner than later.

UPDATE: I posted an update on this blog here.  In short: players cannot legally have free agency.

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