The Catch All CBA (Collective Bargaining Agreement) Thread

Discussion in 'MLS: News & Analysis' started by MLSFan123, Feb 24, 2014.

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  1. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    #51 scoachd1, Apr 4, 2014
    Last edited: Apr 4, 2014
    Since Triplet1 has some good numbers in this thread I'm going to post these numbers which are based of the final MLS players Union numbers of the year. The CBA numbers (all are obviously in $Millions) are from the player Union page on the 2010 agreement and the 2007 number is based on subtracting the increase listed in the previous agreement. The total compensation and Compensation from their team is based on the Union numbers. At the end of the day this is the amount of money being being paid to the players and the so-called salary budget is primarily a floor as the league has used all kinds of mechanisms (off budget players for GA and Home Grown, allocations, limiting DP amounts that count against the cap, player retention funds etc.) to create their real cap/budget which is well in excess of the negotiated one.

    That said the cap does impact how teams can spend. In order to determine what the league real cap is (off budget players for GA and Home Grown, allocations, DP amounts that count against the cap, player retention funds etc. are all mechanism that effective raise what teams are able to spend on their roster) so I picked a somewhat arbitrary amount of $500K per year and separated the salaries paid to those players from the rest of the budget. This was a nice round number and seemed about at the threshold where cheap skate and/or low income teams can start playing games with allocation money and fit players like these into their league paid budget. As such I counted $500K as part of the budget, but not count anything above it. The reason being if you can get a $500 K player on the field for only $X against the cap while some cheapo team gets the same player on the field with allocations and other mechanisms the reality is they are the same.

    YearCBA/TeamTotal CompTotal/team#500K players500K Compeffective cap# teams
    2007$2.288$42.224$3.248 7 $14.665$2.389 13
    2008$2.306$47.280$3.152 7 $15.113$2.378 15
    2009$2.315$51.878$3.459 8 $15.946$2.629 15
    2010$2.550$71.305$4.457 10 $28.013$2.925 16
    2011$2.678$85.079$4.727 17 $33.127$3.081 18
    2012$2.811$99.258$5.224 21 $40.031$3.301 19
    2013$2.952$95.078$5.004 14 $29.901$3.615 19
    2014$3.10019


    edit- its late, I actually screwed up on the 2008 numbers and 2007 CBA numbers
     
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  2. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    #52 triplet1, Apr 4, 2014
    Last edited: Apr 4, 2014
    It's an interesting chart -- again, the money appears to be there for every team to have a lot of $500k players. It's just not distributed broadly, and the reason for that (I think) is that unlike, say, the NFL, MLS is a lot more dependent on gate receipts to fund payrolls.

    I posted this is another thread, but look at the role revenue sharing plays in funding the Packers salaries. I pulled the Packers numbers from 2011 (only because I had them handy). The Packers made $258m that year. Player payroll -- not the cap, total player salaries and benefits -- cost $161m, while the salary cap was $120m. To pay the payroll, the NFL handed the small market Packers two checks, one for $96m, representing the Packers equal share of the TV money, and the second for $46m, representing the Packers cut of merchandise and licensing fees from NFL Properties. (SUM, patterned after NFL Properties, provides the same function for MLS). In effect, by dividing up shared revenue, the NFL gave the Packers $142m of the $161m they needed for player payroll.

    Put another way, shared revenue distributed by the NFL provided a whopping 88% of the funds the Packers needed for total player payroll, and $41m more than the salary cap.

    The beauty of the NFL system isn't just that every team has the same salary cap, but the league effectively funds the salary cap by dividing up national TV and merchandising money. It's an equalized cap, paid for by the teams with equal shares of shared money.

    Now, we all know MLS is different because the league, not the team, pays the players. Even so, to pay the players MLS relies heavily on money contributed to the league by the teams, either in the form of gate receipts or an additional capital call, because the national TV deals are only worth about an estimated $27m. And here MLS' model diverges from the NFL. Because the gate receipts contributed to the league are based on a percentage (which has been variously reported as 30 - 33%), a team like Seattle, KC or Portland with a lot of gate receipts contributes a lot more towards league payroll than, say, Chivas USA. And as long as MLS relies heavily on gate receipts to fund operations, the only way to really boost the salary budget without making a capital call is for the teams with big attendance to shoulder more of the load for everyone.

    That's a hard sell IMO.

    The chart above from scoachd1 shows that the money is there to fund $5m salary budgets now, and if recaptured from the high revenue teams aggressively as I posted earlier, MLS could fund $5m payrolls for every team now. Nonetheless, absent more shared money from national contracts, unless MLS is willing to take more money from the high revenue teams in unequal shares, the revenue sharing formula doesn't generate enough to boost the salary budgets significantly across the board. And, really, in fairness how much extra should Portland or KC pay so that teams like Chicago or New England can enjoy the same salary budget they do? That's really the genesis of the DP rule, I think. Teams willing to pay more for players at least wanted those additional payroll dollars they contributed to remain on their roster.

    The NFL discovered the hard way that it's one thing to divide up national TV money -- money the owners don't really get to touch until the NFL sends them their cut -- but it's another thing to expect Owners to write a check to cover the costs of another team. In addition to the shared TV money and NFL properties, the NFL had a supplemental revenue sharing program where the teams with revenues in the top half of the league had to pay the teams in the lower half of the league not with "national" revenue, but their own funds. On a visit to the Twin Cities in the run up to the new CBA, Jerry Jones fumed, "Right now [other NFL teams] are subsidizing this market," Jones said. "It's unthinkable to think that you've got the market you've got here, 3.5 million people, and have teams like Kansas City and Green Bay subsidizing this market. That will stop. That's going to stop." (It was reported in the Minneapolis Star Tribune, but the link is now dead.) And, indeed, the practice is being phased out in the new CBA.

    If MLS salary budgets are going to go up with this CBA, I really think MLS needs to figure out a way to fund the increase equally, and the best opportunity to do that is the new national TV deal.

    Some of you may be thinking the NFL shares gate receipts too, and it does. Since the early days of the league, home teams paid the visiting team share of the gate, and that practice continues, albeit in modernized form. Because the visitors share of the gate when playing Dallas is a lot bigger than playing Oakland, the NFL collects the visitors' share from every game, tosses it in a pot, divides it equally and sends it back to the teams. So, unlike in MLS, the teams do get it back, and in the scheme of things it isn't a very big number -- the Packers got $16m as their visitors cut of gate receipts in 2010/11, well below what they got in TV money or from NFL properties. They didn't need it to fund their salary cap number.

    http://www.bloggingtheboys.com/2011/2/21/2004505/nfl-lockout-2011-revenue-gap-problem

    For owners who want higher salary budgets, I suggest they plow the added TV dollars back into the salary budgets. I think that's an easier sell.
     
  3. fuzzx

    fuzzx Member+

    Feb 4, 2012
    Brossard
    Club:
    Montreal Impact
    Nat'l Team:
    Canada
    It's been mentioned a few time, but I love the simplicity just making DP's not count against the cap.

    3,4 or more DP's is irrelevant, and teams automatically get $1.2 million in new cap space to spend on sub $400k players. While the overall structure is not changed too much and existing limits on spending and parity all remain.

    Everyone wins.
     
  4. EvilTree

    EvilTree Member+

    Canadian S.C
    Canada
    Nov 20, 2007
    Frozen Swampland, Soviet Canuckistan
    Club:
    Toronto FC
    Nat'l Team:
    Canada
    except the 1.2 mil cap space difference between teams with 3 DPs and teams with none.
     
  5. deejay

    deejay Member+

    Feb 14, 2000
    Tarpon Springs, FL
    Club:
    Jorge Wilstermann
    Nat'l Team:
    Bolivia
    Yup, that will be the big question next year. What happens with the TV money? I've said before that I don't think that the players necessarily want to huge increase in the salary cap. Likewise, I don't think that owners will be against an increase in the salary cap as long as it doesn't affect their team's bottom line. Lets face it, getting a new big salary player can drive a lot of fan interest. There are still 30 unused international spots in MLS and a dozen or so Yanks abroad that would certainly drive interest. None of this makes the current members feel more secure. Instead I think that the PU may be asking for a portion of that money to go to initiatives helping the long term player's security. Stuff like career ending injury insurance, improved bonuses on option years, improved working environments.
     
  6. fuzzx

    fuzzx Member+

    Feb 4, 2012
    Brossard
    Club:
    Montreal Impact
    Nat'l Team:
    Canada
    It would incentivise teams with less DP's to invest in some cheap ~$500k ones, which is also good for the league.
     
  7. deejay

    deejay Member+

    Feb 14, 2000
    Tarpon Springs, FL
    Club:
    Jorge Wilstermann
    Nat'l Team:
    Bolivia
    I think the bigger problem would be that an unprofitable team like the Union will suddenly have to pay 800k more out of their own pocket. Also, it would nullify the benefits of having a young international DP which is essentially an extra 150k to pay other players.

    Nope, don't see it. Again, in reality the salary cap is a salary budget. I don't think that clubs will have problems in assigning more money to the salary budget as long as it doesn't come out of their own pocket. Taking the DP salaries out of the budget is actually asking the clubs to pay more.
     
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  8. fuzzx

    fuzzx Member+

    Feb 4, 2012
    Brossard
    Club:
    Montreal Impact
    Nat'l Team:
    Canada
    True, but taken in the context of increased revenues, particularly TV money that in part or in full is explicitly for paying players, what difference does it make?
     
  9. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    I agree -- that's the NFL model. Except for the DPs, use the national (shared) revenue to fund the payrolls equally, and let the owners keep whatever they generate locally as their reward.
     
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  10. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    As you can see from the numbers, MLS spends well about the "cap." So the players don't care about the cap. Instead what they care about is what gets in their pocket. I'll have to remember the link but but someone did ran the numbers of MLS payroll by region and found the North American players (US, Canadian and Caribbean kids that go to US colleges) were paid something like 27% less the their performance dictated. If the "cap" goes up a 2 million and most of it goes to foreign based players like Richard Eckersly or Danny Koevermans why care about raising the cap. Instead fight against contracts that prevent you from going to other MLS teams that might pay for what you contribute.
     
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  11. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    Its also very much unlike the NFL in that it has to compete with a lot of other teams in the world for talent. So while limiting having a largely equal salary cap in excess of what the bottom can spend won't impact the NFL with regard to the talent it can bring in, it certainly will do that for MLS. Similarly the NFL is the only game in town on Sundays. In contrast, when MLS has its game of the week on tomorrow, there will soccer games televised from Australia, England, Spain, France, Italy, Scotland, Mexico that day. Other days it will be Germany, Brazil, Holland and more. Many of these leagues have teams that are trying to make inroads to the growing US market.
     
  12. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    Bringing better players attracts more fans, look at the 6 years before 2007 and then look at the attendance from 2007 on. But why should the teams barely making any money agree to spend more so teams like Seattle can make even more money? The solution is a continued movement away from the even distributed NFL model cap to other North American sports couple with additional revenue sharing. The bottom line is that Seattle draws close to 100K homes per telecast so keeping them in limelight is good for the coffers but making sure they are not so much better that all teams fans no longer feel they have a chance keeps the league interesting.
     
  13. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    True, but save the portion of a DP's salary that is included in the cap, even if a team has 3 DPs any added salary budget dollars will go primary to the top 4 - 20 players on the roster. Since the dollars that go to the last ten players and most of the DP dollars are excluded from the cap, by putting any additional dollars into the salary budget, it really earmarks that money for the "middle class" of the league.

    Sure, I suspect the players would love some form of restricted free agency, but unless a lot more money goes into payrolls, even if they got it (which is unlikely IMO), it would be a zero sum game. As long as a cap remains, whatever added money went to the free agents would come out of the pocket of the other guys.
     
  14. AndyMead

    AndyMead Homo Sapien

    Nov 2, 1999
    Seat 12A
    Club:
    Sporting Kansas City
    I'm not buying it. There might be a dozen or so Yanks Abroad above replacement level, but I'm not seeing "a dozen or so" that would move the needle with regards to ticket sales or merchandie or TV interest. With Bradley and Dempsey back, Jozy Altidore might be the biggest name outside the U.S. But I don't see him or DaMarcus Beasley or anyone else having any financial impact.
     
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  15. AndyMead

    AndyMead Homo Sapien

    Nov 2, 1999
    Seat 12A
    Club:
    Sporting Kansas City
    ********ing windows highlighted and wiped out my post. Grrr....

    Anyway, let's try again.

    Exactly. The last CBA was primarily about rank and file issues like minimum wages, cost of living raises, 401ks, health benefits and similar things and not about the Salary Budget or DPs.

    Because the MLSPU is one member one vote and the average player wage in MLS is, while much better than the average American, it's not "retire at the end of your playing career" money, I expect the next couple of CBAs will focus on the same things.

    Until the minimums and medians add another zero to the end, I think the rank and file's focus are going to be on quality of life issues and not what the stars are getting, nor even the player payroll as a percentage of league revenues.

    The table of above shows some impressive growth, but the sobering thought is that the entire MLS payroll is the equivalent of two NHL teams. Any two NHL teams.
     
  16. deejay

    deejay Member+

    Feb 14, 2000
    Tarpon Springs, FL
    Club:
    Jorge Wilstermann
    Nat'l Team:
    Bolivia
    Not buying that either. Beasley and Altidore would have some financial impact. Don't forget the non-USMNT players like Subotic and Rossi. Again, they wouldn't have Bradley impact but they would have impact. Certainly impact on the playing field. I would say Bacon, Subotic, Rossi, Bedoya, Jozy, and some more I would name if I my wife weren't looking daggers at me typing when I have stuff to do.
     
  17. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    Of course - but my point is that the owners have been spending well above the "cap"/"Budget." So if the league increases the cap, but increases the amount DP's count against the cap and reduce GA, and other mechanisms the players gain nothing.

    Technically you are correct since once someone signs, they are part of the players union. However, in reality it is not a zero sum game if you look at it from the point of view of the North American players that spend most of their career in the league. Teams are paying big $ to guys coming over from Europe late in the career while North American guys that are contributing more to their teams. The reason is because the guys from Europe have leverage to stay in Europe while the majority of the players union (the north american guys) have no leverage because they'd have to uproot themselves to go to Europe where the laws (a lot of them can't get work permits) and the culture (American players are still fighting an uphill battle for respect) are against them.
     
  18. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    To add to your point, if MLS wants to continue to grow they are going to have to increase wages. Unlike other leagues they compete in a global market. So if they want guys like Bradley and Dempsey to play in their league, they are going to have to pay them. If they are not going to pay potential stars Lletget, Guido, Arriola, Spencer, Perez etc. will go elsewhere. As the quality of the league increases, so will the options for the players. As such the focus for the union is different than other US leagues.
     
  19. Stan Collins

    Stan Collins Member+

    Feb 26, 1999
    Silver Spring, MD
    #69 Stan Collins, Apr 6, 2014
    Last edited: Apr 6, 2014
    I wanted to do the roster-adjusted comparison because I agree with you that MLS 'gets punished' in the public debate every time it commits the sin of employing more people, but then the adjustment might or might not make a lot of difference, since all you're doing is comparing the 50th percentile player from 2009 to the 40th percentile player from 2013 (24/2=12 ; 30/12=0.4).

    There are actually two ways of doing it, one being the above, or one looking at the "average 12th man" by just multiplying 12 by the number of teams in the league at the time (15 in 2009, 19 in 2013). The two methods don't vary much, the only reason they vary at all is because of the league's pool players and a couple of recording discrepancies (in 2009, official docs show ever so slightly less than 24 players per team, and in 2013, ever so slightly more than 30).

    So I'll give both:

    -----------------2009-------(name)----------2013------(name)
    Adj. Med-----$84000 (Andy Williams)-------113,000 (Deshorn Brown)
    12th man----$80000 (Mike Petke)----------114,700 (Justin Braun)

    By adjusted median, that's a 34.5% increase. By 12th man accounting, it's a 43.3% increase.

    That's enough difference that we can say that the median-to-median comparison does the league a disservice. The 12th man is the same category of player he was in 2009, and his wage is significantly better today than in 2009. It grew about 9% per year, compounded.
     
  20. Stan Collins

    Stan Collins Member+

    Feb 26, 1999
    Silver Spring, MD
    Or the perverse incentive to overpay the same players just to make them DPs so that they don't count against the cap. Out of all the salary ideas out there, this one has always struck me as the dumbest. It just screams out "why?" Why is it a good idea to have your best players count the least? How does that make any sense?
     
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  21. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    Good stuff Stan. Re-reading the article again though, honestly both your numbers and the number cited in the article seem counter-intuitive to me. Again, the article noted the median pay had gone up only 18%, but you are correct, since rosters are bigger they are comparing the 15/16 guy today to the 11/12 guy of yesterday. Your adjustments deal with that.

    Here's where I'm stuck. Both in 2009 when the new deal was done and now all of these hypothetical players fell within the group of players comprising the 20 player salary budget. Other than the additional DP dollars and allocation money, the CBA locked down how fast that pool of money to pay these 20 players would grow. The article's basically correct, the salary budget for these players jumped 10 percent, about $200,000, in 2010 for the first year of the CBA, and the cap has gone up 5% per year for the remaining four years of the deal from 2011 through 2014. So when the article says the salary budget for these 20 players has increased 30 percent through the 2014 season, that looks correct to me.

    Sorta.

    Looking at the salary budget number alone, it's gone up from $2.3m in 2009 to $3.1m in 2014 -- that's about 34%, or just about what your showing with your first measurement (but I think your number is only through 2013, yes?, so you are still higher).

    If that's true, I have a hard time reconciling either the median stated in the article or your numbers, especially the 12th man number, with the dollars that were actually available for payroll. If the budget went up 30% - 34% during this five year period, it seems unlikely to me now that the median would go up only 18% as they said unless the dollars were concentrated at the high end or low end of the pay scale. Likewise, 12th man increase is much higher then the salary budget increased to pay the 20 players, 12th man included, suggesting either a lot of allocation money was available to push up the salary budget, that the allocation of those dollars is skewed, or something is off.

    Simply put, for the top 20 players on the roster, excluding allocation money and additional DP dollars funded by the I/Os, MLS increased the budgets $800,000 per team from 2009 through 2014. For the 20 man roster,that's an average of $40,000 per player over the five year term of the CBA, or $8k per player, per year.
     
  22. deejay

    deejay Member+

    Feb 14, 2000
    Tarpon Springs, FL
    Club:
    Jorge Wilstermann
    Nat'l Team:
    Bolivia
    Core player retention funds and Young international DPs were only recently introduced in 2012. Hard to say what the total effect on the budget is but I would not be surprised if it were close to 200k average per team. This also jibes with the marked increase of more expensive players arriving into MLS in the last 3 seasons.
     
  23. Stan Collins

    Stan Collins Member+

    Feb 26, 1999
    Silver Spring, MD
    Also there's question as to how the Home Grown players count against the cap.

    The cap rules are as byzantine as the NFL's, with the additional hurdle of not all of them being specifically published.
     
  24. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    It's complicated because a lot of comp is now "off budget."

    In 2012, the salary budget was $2,810,000 per team. If every penny was spent on all 19 teams, that would represent a payroll of $53.4m. Total payroll, however, was $99.2m, meaning at most only about 54% of total guaranteed compensation was spent as part of the teams' salary budgets subject to the cap.

    http://www.sbnation.com/mls/2013/5/16/4327752/mls-player-salary-release-may-2012
     
  25. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    Not sure if my numbers are different because I use total compensation but in 2009 the 12 man average comes to $1,307249 for an average of $87,150 with Dichio earning the most at $120,000 and Pitchkolan earning the least at $51,250. In 2013 I got $2,268,0605 for an average of $119,370.98 with Maicon Santos earning the most at $164,433 and Carlos Alvarez earning the least at $81,500 for about a 37% increase.
     

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