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MLS announces details of CBA

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Major League Soccer announced the key details of the Collective Bargaining Agreement it signed with the MLS Player's Union on Saturday.

Here are some of the key elements:

The MLS salary cap will increase from $2.315 million to $2.55 million and will increase by %5 each season thereafter.

The CBA provides for guaranteed contracts for all players 24 years old or older with three years of MLS service.

Minimum salaries for senior roster players will increase from $34,000 in 2009 to $40,000 in 2010, with an increase of 5 percent each year thereafter.

Player Contracts will now have a limit on the number of option years they can have. The limit is two option years for players who are at least 25 and have four years of MLS service. All other contracts can have up to three option years.

MLS will establish a Re-Entry Draft. Players eligible for the draft include those whose options were not exercised, those whose contracts were terminated and those whose contracts expired. Here is a breakdown of how these players are affected and what new measures are in place to help them:

Option Not Exercised

A player who is at least 23 years old with three years of MLS service and whose option is not exercised will be placed in a re-entry draft and made available to all clubs at his option salary.

Contract Terminated

A player who is at least 22 years old with one year of MLS service and who is asked to take a pay cut after contract termination will be placed in a re-entry draft and made available to all clubs at his current salary.

Contract Expires

A player who is at least 30 years old with eight years of MLS service and whose contract has expired will be placed in a re-entry draft unless his team makes him a qualified offer that must be at least 105% of his last salary. If placed in the re-entry draft, the player will be made available to all clubs at a salary equal to 105% of his last salary.

A player who is at least 25 years of age with at least four years of MLS service whose contract has expired will be placed in a re-entry draft unless his team offers him a base salary of at least as much as the base salary paid to him in the last year of his contract. If placed in the re-entry draft, the player will be made available to all clubs at a salary equal to the salary in the final year of his contract.

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Players whose annual compensation is less than $125,000, the minimum base salary increase will be %10 for players who play in at least 66 percent of his club's games and 12.5 percent for players who play in at least 75 percent of club's games.

Increases in 401K contributions by the league, appearance fees, per diem and relocation expense reimbursement. Among the addtional player benefits in the CBA are full health care benefits for every player and his family at no cost, 401K contributions and expanded insurance benefits.

Bonuses for wins and exhibitions. The CBA includes a package of bonuses for wins in MLS games and international tournaments, as well as appearance fees for international exhibitions.

The sides reached an agreement on an extension of the Group License that will run through 2015.

The sides will establish a joint committee to study the re-launch of a Reserve Division. In the event the rosters are expanded, the salary for those players will be a minimum of $31,250, with additional annual increases.

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So what do you think of the deal? Think the players made out well? Think the league got off cheap?

Share your thoughts below.

Comments

  1. Seriously? First of all, the increase this year alone is 235k. By the end of the deal, the cap will be 3.1 mil. That’s a 34% increase over the cap today. That’s huge. Plus, you can get a quality MLS player for 130k. By the end of this deal, teams will be able to have 6 more players at that salary than they can now. If you added 6 players worth $130k to the Red Bulls right now they’d probably be the vest team in the league. The bump in the cap is solid, IMO.

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  2. I consider myself a major advocate for the players and I actually think they won the battle. So, no, it’s not clear at all that the league won this 100%

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  3. Players already had insurance for themselves and their family. This consession is saving the players a $250 annual deductible ($500 for family) on their insurance. 401k contribution, Moving expenses, and Per Diem were part of the last agreement, it will be interesting to see how much that increased.

    A quick look at current rosters show only about 50% of the players are eligible for guaranteed contracts. A quick unscientific breakdown of guaranteed contracts:

    Chicago – 9 players eligible under the new CBA

    Chivas – 9

    Colorado – 12

    Dallas – 7

    Houston – 13

    KC – 8

    LA – 12

    NYRB – 12

    Philly – 7

    RSL – 10

    SJ –

    Tor – 6

    MLS is a young players league. Many of the rosters are filled with 19 – 24 year olds with minimum league experience.

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  4. Overall, it sounds like a decent deal.

    I don’t get the need to have a committee to study the reserve league — they should just return it. I cannot see what the downside of this is, at least from the game standpoint.

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  5. $40,000/year to do what you love, plus 100% contribution by the league to your health insurance plan is a very adequate minimum for now. I don’t think it’s great for people over the age of 25, but for players just entering the league in the late teens, it’s great. For players entering in their early twenties from college, it’s not bad either. I live in NYC and I’m an actor. It is not easy to survive on $30,000 without a couple roommates. $40,000 makes it a bit more manageable, but still probably need roommates or live in a really modest place.

    Having said that, it’s an adequate improvement though it certainly will not the level of play dramatically any time soon. And, implementing 2 DP’s to all clubs won’t do it either if the DP’s are guys in their thirties, winding down their careers. I don’t think there are many players, if any, that can draw crowds like David Beckham could.

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  6. The CBA because it’s a fair compromise. But more than anything, the CBA is expansion-friendly. MLS has a stated goal of expanding its geographic footprint to 24 teams, which is a reasonable goal over the next 5 years. Potential owners would be wary of entering a league without some guarantees in cost containment.

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  7. Considering how dire the situation seemed leading up to the settlement, I’m surprised the players got “this much”. Of course, I bet they would have preferred a 3 year contract.

    The MLS is now a better place for the average player and it feels like it will be even better 5 years from now.. at least thats progress.

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  8. Old finance saying: profit is an opinion, cashflow is a fact. Are there any team ownership groups makng available the full financial report? I doubt it, but would love to seethem… The USSF does, and that was educational.

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  9. My question is this… Are the owners losing money on MLS teams when talking about operational costs of only the team when compared to profits, are they adding in their shirt deals and other advertising dollars, or are they taking into account the total operational costs of the team and OTHER STADIUM EVENTS? That is to say, all the money owners make off of concerts and stadium functions, ie the benfits of owning a stadium, is that money being counted?

    I can imagine that Toronto, Galaxy, and Seattle all break even given their crowds. I would assume that Houston (especially now that they are about to have a SSS) and Columbus are really close to even.

    I just don’t think these guys are really hurtng that badly. Otherwise, there wouldn’t be millionaires lining up to be owners, saying “Let me lose millions!”

    It just seems like a little BS to get sympathy publicly.

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  10. We know about your ankle problems, Mr. Olsen, but we’re not going to pony up a wad to get you off regularly scheduled flights. So sorry,

    Don.

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  11. the health care and 401k are huge. These players should be having better benefits and pay than me, and I’m not exactly raking in the big bucks

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  12. So, there’s a new cutoff date, when the rosters are cut down to 24? That’s what I was asking — is that the date, or is it perhaps Jan. 1 (or later, for contracts that aren’t signed yet on that date)? Are all contracts subject to that, or can a player negotiate a guarantee for 3 or 4 year contract — rather than being treated as a series of one-ear contracts that become guaranteed at some point during the year?

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  13. Regarding the reserve league part, I think they should try to make it a regional thing and try to involve Division 2. Fact is, travel costs are a huge reason the reserve league died in the first place. So instead of the Crew Reserves playing teams like the Galaxy, they would start playing against the reserves of the Minnesota Stars and Rochester Rhinos as well as Toronto and New England. Best case scenario would be for teams like the Dynamo who would be able to drive a van to Austin and save a ton. The reserve league is only meant to develop youth and keep players fresh, so there’s not much pride to swallow. It’s a cheaper alternative to the nationwide travel of past and the insufficient method currently of playing college teams. They HAVE to at least consider this as an option…

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  14. I don’t necessarily think it “doesn’t translate” but I would support allowing direct affiliation with either PDL or USL 2 or NPSL teams or something like that.

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  15. I’m not crazy about the whole reserve division idea. The concept doesn’t translate into North American sports culture. IMO, the best way to develop players would be for MLS to permit clubs to align themselves w/ NASL/USL teams or or own their own.

    As for the rest of the CBA, disappointed w/ such a small increase in salary cap. It’s gonna continue to hold back the quality of the league

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  16. The CBA provides for guaranteed contracts for all players 24 years old or older with three years of MLS service.

    So if you’re 23 or 25 with one year you’re beat?

    Salary cap and min payments didn’t change that much. Not that much of an improvement if you ask me. Still need everyone with contracts. That’s a basic work right.

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  17. yea but thats just for now u never kbow soccer mite boom and te salary cap is 10 mil and up… i mean sometime u gotta take it at a slower pace in 10-20 years our league will be one of the biggest cuz every1 wants to come here just give it time dude

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  18. I think it’s a good deal in light of the still relatively shallow foundation on which the league is built. But I thought we would see more 0of an increase in base salaries. Let’s say even 10 players on a team (unlikely) made the base salary. With 18 teams, that would be 180 players. And let’s say the MLSPU asked for $60K base (a 67% salary increase) instead of 40k (an 11% increase), that would only have required an additional $3.6m from the owners per year. At a cost of $200,000 more per team, the MLSPU could have got another $20k for base salaries. I would think that would have been doable, but it seems that was not where their priorities lied.

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  19. $40k a year for a senior? wow, i made that getting out of college. a player in NYC definitely cannot get by on 40k a year. that might get you a decent apartment in a poor neighborhood on the edges of the metro area.

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  20. SO what happens to players who aren’t claimed in the re-entry draft? Do their rights just revert back to their previous team and then anyone who picks them up has to compensate them?

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  21. DC Josh, I am with you on the reinstatement of the reserve division. The league would be so much better if they invested in developing young talent.

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  22. Thanks Randall. You have proved my long standing theory that very few people actually read what Ives says before posting a comment.

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  23. Reserve division would make a huge difference for developing young players and the future success of the league. With the exception of a handful of top European leagues, most leagues are feeder leagues. Teams from most leagues develop young talent, sell it at a profit to Europe (transfer fees, etc), reinvest. Josie Altidor I believe fetched a transfer fee of $10 mil., which is several times the salary cap of the MLS team he played for. Currently limitations on roster sizes and lack of reseve division hamper the teams’ abilities to develop young talent. Teams may prefer to play a 30 year old who does not have much upside but is a known quality and gives a better chance to win today instead of a talented but unproven rookie. Reserve division would provide talented young players with precious playing time and speed up their development.

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  24. Well, they’re increasing each year by an amount roughly equal to current cap / roster slots. And inflation is projected to be low over those five years, so (again, roughly), we should expect to have about 5 additional player-equivalents of present-day talent per team at the end of the period. That should just about hold steady the quality of MLS through the expansions that are planned immediately.

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  25. Yeah, there’s some details here that havent been spelled out. Obviously, the owners already knew that a higher salary cap was going to be part of the deal. The reason I wonder, is that the Seattle striker Nifuko or Nifuno or whatever is NOT a DP at a rumored salary of $550k. So I’m thinking that the maximum non-DP salary is higher then the $375k that it was last year. Maybe its going to be $450 or something, and they’re giving him another $100k for advertising or something, but it looks like Sea is looking for a 2nd DP. Did the owners already OK the 2nd DP?

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  26. Definitely very interesting that it’s a five-year deal. The league certainly made sure it didn’t encounter this BS again during a World Cup year. The league will now benefit from both the 2010 and 2014 World Cups without idiotic posturing by the players union threatening to undermine everything.

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  27. if DCU offered him a contract worth at least 105% of his previous one, then I think so, yes.

    my question is can a veteran take a contract for less than 105% of his previous one, if he wants to? I assume so, but it’s not really made clear.

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  28. There’s no logic to that. How you allocate a player is separate and independent from who that player contracts with. Which is why when MLS teams sign DPs from outside the U.S., there is no “draft.” Instead, the club gets the okay from MLSHQ and the player signs with the league. The draft is simply an alternative mechanism to a free market system to allocating players. Theoretically, you could use a free-market system up to some cap and just have MLS agree and pen the contract. In that case, the single entity system still fully shares profits and losses but has failed (at least some degree) to exert total control over the supply of labor.

    It may be as oxymoronic as “free economic” zones within China, but the two systems are not per se mutually exclusive.

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  29. DC Josh,

    I think the team keeps the rights for something like 2 years (though i admit this is one of those flexible rules.)

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  30. $40k in NY or San Jose is just enough to rent a studio apartment and stock your kitchen cabinets with cup ‘o noodles. Do clubs in areas with a high cost of living factor that into their minimum salaries or is it 40k across the board?

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  31. Overall I think the New CBA is good for the players and the league:

    1) Increase to the salary cap (even this small of one), guaranteed contracts, Minimum Base salary increase, & Bonuses for winning, will help to keep players in MLS.

    2) Full health Care benefits for players and their families.

    3) Potential Re-Launch of a Reserve division. Without a development league or additional roster spots it’s hard to take the risk of developing young players. This gives the teams/league a deeper talent pool, which will help to improve the league in the long run.

    4) While I don’t believe the re-entry draft is a perfect solution; it does allow for players who are waived, terminated, etc… to still have the opportunity move to a team that does want them. Maybe in another 5-10 years the league will move away from the single entity format; at which time true Free Agency would be possible.

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  32. Also – can you clarify the Dave Van den Bergh situation? He is over 25 with 4 years MLS experience. So that would seem to mean that he would be eligible for Re-Entry Draft at last year’s salary. But an ESPN.com article yesterday(?) said he won’t be eligible? If so, that’s garbage.

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  33. minor league deal for a league that want’s to be treated like a major league..doesn’t do much to improve the quality of play

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  34. Overall, I think not a bad deal they hammered out. To me the main things the players got are health insurance, more guaranteed contracts, and they upped the minimum wage, which probably impacts a lot of players.

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  35. Just to be clear – if an eligible player goes through the Re-Entry Draft and no team drafts him, then … his rights remain with the original team, correct? And the original team can offer him whatever salary it wants?

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