CBA Talks Break Down, Strike Seems Likely

March 3, 2015

Update: STRIKE AVERTED!  Games will commence as scheduled.  The details: MLS agrees to restricted free agency.  All players over 28 years old and with eight years in the league can become free agents.  However, their salary increases are still capped depending upon their previous salary.  League minimum is now at $60,000 for players.  The CBA will last for five years.  Personally, I think the owners won on this one, as they protected their Single Entity LLC status, still capped free agency salaries so the players are not truly free agents within the league, and max salaries were not raised, nor were teams given an extra DP slot, which would mean more expenses.  Official terms still to be announced!

You know things aren’t going well when a union rep tells a pundit “I hope your Orlando flight is refundable.”  A strike will probably happen, unless there’s a miracle in the next 24 hours.  What does this mean for MLS?

First, it’s very bad.  If the NHL and MLB have taught us anything, it’s that the damage of a strike can take years to repair in terms of attendance, and some teams never recover.  A prolonged strike would certainly stunt the growth of MLS, which has been been steadily improving the past five years–Orlando City FC just “sold out the bowl,” selling a 60,000 tickets for its inaugural match, a match that will likely be postponed now.

Second, it gets worse. The MLS is already losing $100 million annually despite the growth.  A work stoppage stops the income from the TV deals it just signed, ticket sales, etc.  Not having that revenue in a league that’s already spent a lot of money growing itself may be its financial death knell.

Third, the MLS may lose what it wants most: Single Entity LLC status.  The players want free agency.  MLS offered free agency to players who are 32 years or older (past their prime) and spent 10 years with a single team (which never happens).  Everyone in the soccer world laughed at the outrageous conditions MLS proposed, which has a snowball’s chance in hell of being accepted by the players.  To give an idea of how ludicrious the offer was, only six players in the entire history of MLS, and one current player, would qualify.  The offer is so bad it might even embolden the players to sue because of how insulting it is (that’s just my opinion).

The players have already sued once about the league’s Single Entity LLC status in Fraser v. MLS.  While the players lost, the First Circuit Court of Appeals ruled that the MLS is a “hybrid” single-entity LLC, which held the door open for future legal action.  Without a CBA, the players can begin the legal process of ending the MLS’s Single Entity LLC status.  That process could take years.  If a CBA had been agreed to, the players could not sue MLS.

Right now there are a few options.  The players can play without a CBA and sue MLS, which might cause a lockout.  The players can strike and cripple MLS–and possibly themselves–financially; a strike would likely last a week to a month, at which time the players might be compensated by other unions.  Or the owners and players can agree on a CBA in the next few hours/days, something I doubt will happen unless the players are willing to concede no free agency, or the owners offer a better option for players who would qualify as free agents.

Free agency is almost a Catch-22; MLS may be damned if it does, and damned if it doesn’t.  MLS does not want free agency out of fear of an NASL repeat of the 1980s in which free agency killed the league, but no free agency may also kill the league due to a work stoppage.  If the owners share Dell Hansen’s view that free agency is “a waste of time conversation” and refuse to entertain some sort of free agency, or continue to present outrageous criteria for free agency, the MLS may find itself in the same graveyard as the 1980s NASL.

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