MLS and MLS Players Association Reach New CBA
With the 2021 MLS Campaign set to kick off next week, the Players Association negotiated a new Collective Bargaining Agreement in February that aims to protect workers for the foreseeable future. The CBA addresses the impact of COVID-19 and the modernizing media landscape to ensure proper compensation for every professional soccer athlete in the league. But what does it really mean?
MLS News: In February, the Major League Soccer Players Association (MLSPA) finalized a new Collective Bargaining Agreement (CBA) covering the next seven years through 2027 season. MLS and the MLSPA and players worked together to address the major impact of the COVID-19 pandemic on the League in 2021 and beyond. The successful talks which concluded in an agreement were the third time that the MLS and the MLSPA attempted to come to a resolution during this difficult and uncertain pandemic.
In the CBA, it is clear that the first 32 seasons of MLS — from 1996 through 2027 — will have occurred without a work stoppage.
The agreement was ratified by the MLS Board of Governors and the membership of the MLSPA.
The new CBA addresses the impact of COVID-19 on the league and players. One of the goals from the players’ side was no cuts to 2021 salaries. Players will receive their full salaries regardless of the financial impact of COVID-19.
The primary terms include:
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- Two-year extension with expanded free agency: A two-year extension of the existing agreement. In 2026, players 24 and older with at least four years of MLS service at the end of their contracts are eligible to become free agents within MLS. This provides players at an earlier stage of their careers with opportunities to negotiate contracts.
- 100% compensation in 2021: Players will receive 100 percent of their compensation in 2021, including salaries and bonuses.
“We thank the MLSPA leadership and the players for their thoughtful and collaborative approach on the new CBA.”
Don Garber – MLS Commissioner
“We worked together to address the ongoing impact of COVID-19 on the League, and we appreciate the players’ efforts to develop a CBA that deals with the uncertainty of the pandemic while also providing stability during the next seven years to enable further growth,” said Don Garber – MLS Commissioner. “We look forward to seeing the players on the field in a few weeks as we launch the 2021 season.”
An overview of player compensation for the new CBA is provided below:
| Year | Salary Budget | General Allocation Money | Discretionary TAM | Available Spend on Roster* |
|---|---|---|---|---|
| 2021 | $4,900,000 | $1,525,000 | $2,800,000 | $9,225,000 |
| 2022 | $4,900,000 | $1,625,000 | $2,800,000 | $9,325,000 |
| 2023 | $5,210,000 | $1,900,000 | $2,720,000 | $9,830,000 |
| 2024 | $5,470,000 | $2,585,000 | $2,400,000 | $10,455,000 |
| 2025 | $5,950,000 | $2,930,000 | $2,225,000 | $11,105,000 |
| 2026 | $6,425,000 | $3,280,000 | $2,125,000 | $11,830,000 |
| 2027 | $7,068,000 | $3,921,000 | $2,025,000 | $13,013,000 |
MLS clubs can exceed the above figures with spending on up to three Designated Players and up to three players through the League’s under-22 player initiative.
Similar to previous CBAs, players will also share the increased revenue generated by MLS’ new media agreements beginning in 2023.
MLS will increase player spending by an amount equal to 12.5 percent of the incremental media revenue, as defined in the CBA, in 2023 and 2024. The figure will increase to 25 percent for the 2025, 2026 and 2027 seasons. The league’s current local, national and international media rights partnerships expire at the end of the 2022 season.
Team bonuses and 401(k) contributions will remain as agreed to in the previous CBA.
Free Agency
For the 2026 and 2027 seasons only, the new CBA increases compensation that free agents can earn.
- For players making the maximum salary budget charge or less, a free agent can sign a contract with another club with an initial salary of the greater of $25,000 above the maximum salary budget charge, or 20% above the player’s prior salary.
- For players making between the maximum salary budget charge and the maximum targeted allocation money (TAM) amount, the player can earn 20% above the prior salary up to $500,000 above the maximum salary budget charge and 15% of such salary from $500,000 above the maximum salary up to the maximum TAM amount.
MLS Salary Increases
The Maximum Salary Budget Charge, the maximum a club can be charged for an individual player on the team’s salary budget, increases from $612,500 in 2021 to $883,438 in 2027.
| Year | Maximum Salary Budget Charge |
|---|---|
| 2021 | $612,500 |
| 2022 | $612,500 |
| 2023 | $651,250 |
| 2024 | $683,750 |
| 2025 | $743,750 |
| 2026 | $803,125 |
| 2027 | $883,438 |
MLS Player Compensation
Minimum salaries for senior roster players increases from $81,375 in 2021 to $125,875 in 2027. Minimum salaries for reserve players increases from $63,547 in 2021 to $97,700 in 2024.
MLS Pro Soccer Player Contract Guide
To provide additional context, the 2019 Salary Guide will be reviewed. The 2020 season is currently unavailable on the MLS Players Association’s website. In the guide, player salaries are broken down into two numbers:
- Current Annualized Base Salary
- Annualized Average Guaranteed Compensation
The Annual Average Guaranteed Compensation figure includes a player’s base salary and all signing and guaranteed bonuses annualized over the term of the player’s contract, including option years.
For example, a player with an annual base salary of $500,000, whose contract has an initial term of two years with two one-year options and received a $100,000 signing bonus will have an average annual guaranteed compensation of $525,000 (base salary plus signing bonus ($100,000). The signing bonus was divided by the number of contract years (four).
The Average Annual Guaranteed Compensation figure also includes marketing bonus and agent fees, both annualized over the term of the contract. The Average Annual Guaranteed Compensation figure does not include Performance Bonuses due to no guarantee that the players reach bonuses.
The figures above include compensation from each player’s contract with MLS. They do not include compensation from contracts with individual teams or affiliates.
Pay Discrepancy & Working Conditions
Despite the growth to 27 teams in 2021, negotiations to protect players in a modernizing league has hit the forefront. Following the announcement of the new CBA, the MLSPA expressed gratitude to the league for protecting current and future players.
Statement on MLS Players’ Ratification Vote: https://t.co/Gqk3Ft50Iz
— MLSPA (@MLSPA) February 8, 2021
Players are ready to play. pic.twitter.com/y03JzafjV4
The CBA news follows years of continued negotiations to provide MLS players with adequate compensation.
In 2018, the average MLS player earned $411,926 in guaranteed compensation, according to the MLSPA. The median was $179,000, indicating that compensation of elite players increased the average. A third of the league, 238 players, earned less than $100,000.
In recent CBAs, a number of provisions improved pay and working conditions. For instance, teams had to use charter flights for eight legs of travel in 2020, as well as for all playoff matches and CONCACAF Champions League games. That figure will rise to 16 by 2024. The majority of travel will still consist of commercial flights, as many team owners have objected to the cost of charter travel.
SoccerToday looks forward to the 2021 MLS campaign. Stay tuned for more coverage throughout the season.
