MLS and Players’ Union in CBA Negotiations

Discussion in 'MLS: News & Analysis' started by Yoshou, Sep 28, 2018.

  1. Matt Hall

    Matt Hall Member+

    Sep 26, 2012
    Club:
    Philadelphia Union
    Just trying to help support a common understanding of the backdrop to this negotiation, since there was some disagreement on the underlying sports trends in the US.

    As for being hyper-focused on revenue splitting, we are what: maybe 3-4 stadiums, a combined national/local TV contract, and earlier free agency away from that world? Which could be as soon as 1 medium-length contract from now.
     
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  2. s1xoburn

    s1xoburn Member

    Aug 25, 2014
    Club:
    Orlando City SC
    I think point 2 is really the key. I think this is also why the "NFLPA is so bad". Yeah, Patrick Mahomes is special. But it is really crazy how many players go from near all star level to out of the league within 2 years. The owners can afford to lose a year, the players can't. Let's say the players go on strike for a year, and then the owners relent and give them 60% of revenue instead of 50% (or whatever the numbers are). What percentage of players will make more during their careers with the pay raise, accounting for the lost time? Maybe 5%? Maybe?

    I think it's ridiculous that courts let professional sports violate labor laws, which they do. You can't legally have a salary cap in any other line of business. And in any other business if your employees go on strike for a year, you no longer have a business. The disparity in power between the players and owners is stark, and while I think it would probably be sub-optimal for the growth of MLS, the fair thing to do is for courts to strike down most of the player restrictions and salary restrictions in professional sports. No draft, no one and done, no salary cap.
     
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  3. GunnerJacket

    GunnerJacket Moderator
    Staff Member

    Sep 18, 2003
    Gainesville, GA
    Club:
    Arsenal FC
    #153 GunnerJacket, Jan 13, 2020
    Last edited: Jan 13, 2020
    Salary caps ( or comparable measures) are vital to any league wishing to retain a sense of internal competitiveness. Sports leagues aren't like other industries because the teams are codependent on one another in creating the product. Teams need other teams to play games and leagues in which to play in order to have a competition to win. Something that helps ensure competitiveness makes the league as a whole more appealing.
     
  4. Fighting Illini

    Fighting Illini Member+

    Feb 6, 2014
    Chicago
    Courts don't interject themselves into labor relations that have been collectively bargained. That's a general rule, it's not just for sports.

    But what players unions can do, and have done in the past, is decertify their unions and sue under antitrust law where, as you say, all of the big four are in obvious violation (MLB's Supreme Court-issued exemption notwithstanding).

    Players have only ever done that as a leverage move as part of CBA negotiations. They have a variety of reasons to desire unionization and a CBA. But all kinds of things in American sports wouldn't be possible if that weren't the case.

    The NBA instituted a salary cap in 1984, the NFL did in 1994, and the NHL did in 2005. MLB does not have one.

    It really bums me out when people convince themselves that anti-labor collusion is a necessity.

    Robust revenue sharing could and would prevent any American league from turning into the EPL. The only difference is that players would get a much larger share of the pie, which they unequivocally deserve.
     
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  5. ThreeApples

    ThreeApples Member+

    Jul 28, 1999
    Smurf Village
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Is that really true? Many collectively-bargained union contracts define the entire wage structure for the bargaining group, so their is a de facto cap there--whatever the theoretical maximum under the contract's wage structure is.

    Perhaps so, but what sports union has gone on strike for a year? The canceled NHL season was a lockout.
     
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  6. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    I'm not going to pretend I have the background and knowledge of economics you do, but, I would think the fact that there isn't a lot of competition is the primary reason. When the AFL and NFL were competing or the ABA was fighting the NBA or the NHL was fighting WHL, the players had a lot more leverage. Much as is the case with European soccer players today. Now all Big-4 athletes can hope to do is attempt to win a Pyrrhic victory against a more heavily armed opponent who has the benefit of time.

    As has been noted, MLS is in the investment stage of the business cycle, so players aren't have an issue with the amount the owners are investing in salaries, just the fact that pay is often more a function of entry point into the league rather than performance.
     
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  7. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    I have very limited knowledge and even less interest in learning labor law and thus can be completely wrong here, but I thought there were certain windows which unions are able to decertify. Assuming this is true, it also seems to me the players union missed the window to easily do this.
     
  8. Matt Hall

    Matt Hall Member+

    Sep 26, 2012
    Club:
    Philadelphia Union
    It depends on the comparison. In a unionized monopoly like basketball it's 1 v 1 bargaining, and it just comes down to profitability (upper bound), outside options for players (lower bound), and relative power.

    In somewhat decentralized industries without unions like software development, it's competition that keep programmers' wages up (which is why there was an anticompetitive effort underway under the guise of "no poaching" in past years).

    In oligarchical industries with unions like the airlines, it's some of column A, some of column B. But I'd say closer to A because you can describe leaving airline X and becoming a pilot at airline Y as your "outside option", which is relatively low considering how wage increases and pensions are structured.

    YMMV on what soccer looks like here - I think for some players it's a pretty smooth market and for others it's decidedly lumpy (different countries / languages / employment restrictions, difficulty in scouting the whole world of pro players, etc).
     
  9. Matt Hall

    Matt Hall Member+

    Sep 26, 2012
    Club:
    Philadelphia Union
    Side note - lot of people take the league at its word here, but in the "investment" stage of a growth business salaries should be low as a share of expenses, not necessarily low as a share of revenues. In fact, salaries are typically high as a share of revenues during the early stages of a new business.

    I used to get a little bit of flak whenever I simplified the MLS ownership mindset into "a bunch of NFL guys", but to the extent that resonates with you: the NFL model is one where a bunch of owners who made their money in traditional industries (or inherited their wealth, which is the oldest traditional industry) are calling the shots.

    I think that's partially why you see such an incrementalist perspective here, with steady state salary share approaching equilibrium from below rather than from above. It slows down the trajectory to the extent that better players would accelerate revenue growth, but it's not necessarily wrong. MLS isn't Uber, after all.
     
  10. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    In actual CBA news, both Jeff Laurentowicz and Evan Bush were quoted as saying that the league and MLSPA have traded proposals and there’s been movement on both sides.

     
  11. s1xoburn

    s1xoburn Member

    Aug 25, 2014
    Club:
    Orlando City SC
    Yes and no. As was said by Fighting Illini, if you enforced rigorous revenue sharing you could get a pretty good amount of parity. You would probably lose more parity in MLS versus other sports because the numbers are smaller. If TFC decides they are ok spending $15 million more on salaries per year than (most) other teams, you could really build a good team. Spending an extra $13 million per year in the NBA gets you like 1/3rd of a Steph Curry. I will admit that a salary cap almost certainly improves parity and leads to league growth, but "artificially paying your employees less than they are worth" is profitable business strategy across most fields, which the government/courts have (rightly) deemed illegal.

    This is all true, but the flip side is that decertification and court battles take time, and players don't have time. I agree with most of this article on the subject. https://theundefeated.com/features/...the-nflpa-and-other-unions-could-pay-off-big/

    But generally sports league owners are better able to weather a work stopping versus almost any other industry (due to having a monopoly status on each sport), and the players have a shorter active career than almost any other industry, which gives ownership leverage over the employees that's simply orders of magnitude greater than other industries.

    Is there really any evidence that better players improve revenue growth? MLS is weird. Some cities love MLS, some cities don't. That is my one sentence explanation of MLS fandom. Winning matters a little, but not as much as you would think. Is the quality of MLS player better in 2019 than in 2014? I would hope so. The average base salary for non-DP senior players went from $138k to $345k. https://soccer.nbcsports.com/2019/06/12/2019-mls-player-salary-list-released/ Attendance is down for most teams that existed in 2014. https://en.wikipedia.org/wiki/Major_League_Soccer_attendance TV ratings went from 240k on ESPN2, to 241k on mostly ESPN with some ESPN2. Presumably being shown mostly on ESPN in 2014 would have had higher ratings. https://en.wikipedia.org/wiki/Major_League_Soccer_on_television

    My #unpopularopinion is that MLS would be better off (in the long run) spending money on youth development through making youth soccer free for every kid than on salaries, but in general I think MLS is likely to recalibrate a bit as a selling league because it isn't clear that spending more on players is good for revenues, but it would likely be attractive for players who want to develop before going to the EPL or wherever.
     
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  12. Paul Berry

    Paul Berry Member+

    Notts County and NYCFC
    United States
    Apr 18, 2015
    Nr Kingston NY
    Nat'l Team:
    United States
    At least some of the attendance reduction this season was due to a 50% increase in midweek games.

    I think the TV audiences will look better when they publish a fairly accurate estimate of streaming viewers.

    A little unrealistic. There are 50 million kids between 6 and 17. Imagine the cost of kits, cleats and travel, plus the cost of training and certification for millions of coaches and referees.

    Then there are the Weston McKennies and Haji Wrights who attend free MLS academies then piss off to Europe anyway.

    Kids can play soccer for free every day of the week. We just need to teach them foreign concepts like sweaters for goalposts and 3-and-in.
     
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  13. Matt Hall

    Matt Hall Member+

    Sep 26, 2012
    Club:
    Philadelphia Union
    You'll be unsurprised to learn that the 2 year interval where revenue grew fastest was 2014-2016. So my one-sentence explanation is that TV contract expirations are the biggest determinant of revenue growth :)

    But to your question, I don't have any overwhelming evidence for my theory. I simply imagined the desired end state, where to be a really big deal (NHL level revenues) MLS has to pay a lot of money for great players, and I worked backwards from there.

    Would I bet money it's correct? Yes. Would I bet the league's solvency on it? No. The incrementalist approach is ok with me, where we argue around the margins.
     
  14. mbar

    mbar Member+

    Apr 30, 1999
    Los Angeles, CA
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    I found it interesting today that the WNBA and their players association reached a new CBA and they very clearly made a concerted effort to present the accord as a huge step forward for the game on both sides and everyone's a winner etc.

    I didn't really look at the details but I just thought it was interesting the way they used the labor negotiations as an opportunity to generate some publicity and goodwill.

    I wonder if MLS might do the same if this all settles without too much blood being shed.
     
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  15. Paul Berry

    Paul Berry Member+

    Notts County and NYCFC
    United States
    Apr 18, 2015
    Nr Kingston NY
    Nat'l Team:
    United States
    "As part of the announcement, Engelbert said top players will see their pay tripled once the new CBA is instituted."

    I'm sure that helped.
     
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  16. Stan Collins

    Stan Collins Member+

    Feb 26, 1999
    Silver Spring, MD
    Don't know if this is a separate point or falls under 1), but there's a distinct 'class' difference between the players on the minimum and the ones making eight figures. The latter are far more numerous, and the typical ownership guide for navigating union negotiation is to give that class enough to successfully hold down the salaries of the eight-figure class. This is why the stars in the NBA, which is the most star-driven league, have threatened to de-certify the union from time to time--it doesn't really represent them, it represents the third of the league that's on or close to the minimum. But if the eight-figures couldn't pull it off in the NBA, they are still less likely to get their way in every other league.
     
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  17. s1xoburn

    s1xoburn Member

    Aug 25, 2014
    Club:
    Orlando City SC
    It is definitely possible that the actual attendance numbers are better than they look. But when people say that "improving quality of play will boost revenues" you are essentially arguing that there is some non-trivial population of soccer aficionados in North America who aren't tuning in (or going to) current MLS games, but would with a slightly higher level of play. I am fairly skeptical of this. It appears that MLS believes more direct competition with Liga MX would raise interest in MLS, presumably centered on the substantial Liga MX fanbase, and this seems like as good of idea as any. Quality of play won't get you more fans, but raising play to the level where teams are on par with Mexican teams might?

    If all the best players in the world played in MLS I am certain it would do wonders for the domestic popularity, but that isn't going to happen in the foreseeable future.

    I don't want to derail this thread too much, but I think MLS teams should be forced to sponsor free soccer leagues in their home metropolitan areas. It would clearly miss a good portion of kids who fall outside that area, but getting all kids playing soccer would both significantly improve the level of professional talent and create more soccer fans. I could be wrong about this, but it is what I believe.

    I basically agree with this. I don't think anyone spends a few hundred million on an MLS franchise with the dreams of having a middling regional league. Looking at transfermarkt values for MLS and LigaMX teams, they appear to be roughly 50% higher for the typical team in LigaMX. I don't know if there is a linear correlation between salary and transfer value for the typical player, but assuming it isn't too far from that, raising salary budgets by $5-6 million should bring MLS in relative parity with Liga MX (assuming LigaMX doesn't also start spending a lot more).

    The median team in 2015 spent just over $5 million in salaries, and 75% of teams spent less than $6 million. https://www.angelsonparade.com/2015...ding-expansion-teams-spending-big-compete-now

    The lowest spending team in 2019 was the Dynamo at $7.6 million, which is more than $4 million more than the lowest spending team in 2015, and the median guaranteed salary was about $10.5 million https://www.bigsoccer.com/threads/2019-mls-team-payrolls-compiled-from-spotrac-com.2105660/

    I have no idea what the media landscape is like, but if there is a decent boost in TV/media revenues by 2025, it isn't crazy to think that the typical salary budget could roughly match that of Liga MX by the time they negotiate the next CBA. Slow, steady growth in salary spending is the easiest way to let GMs manage their budgets and not waste money, so if you have a salary spending goal in mind, it makes sense to work your way there, even if it doesn't necessarily recoup itself in the short term.

    If I had to guess the owners will lump in the TAM with the current salary budget (with the possible exception for the discretionary stuff). They might need to change the DP cap hit some, since that is based upon the salary budget and doesn't currently include TAM. And then I assume there will be lots of flexibility for bringing back TAM if they sign a big TV/media contract in 2022.
     
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  18. Fighting Illini

    Fighting Illini Member+

    Feb 6, 2014
    Chicago
    Is that not precisely what has happened in the last five years?
     
  19. CMeszt

    CMeszt Member+

    Farewell Sweet Prince
    Jan 9, 2004
    Gentrification's Apex.
    Club:
    Philadelphia Union
    not really.
     
  20. s1xoburn

    s1xoburn Member

    Aug 25, 2014
    Club:
    Orlando City SC
    Is there a metric which shows significant growth in MLS popularity over the past 5 years? It isn't apparently in the TV ratings or attendance numbers.

    MLS has done a much better job figuring out which cities are good for MLS (9 of the 10 bottom teams in attendance are from before 2000, 9 of the top 10 teams in attendance are from after 2000, including all of the past six teams), than generating same-market growth. Average attendance in 2019 was actually below 2015, despite adding ATL, which leads attendance by a significant margin, Cincy, which is #3, LAFC and Minny, which are both above average.

    There could be more midweek games, maybe fewer tickets are given out, etc, but negative attendance growth while doubling player spending doesn't really support the idea that americans are clamoring for a somewhat better soccer product.
     
  21. Paul Berry

    Paul Berry Member+

    Notts County and NYCFC
    United States
    Apr 18, 2015
    Nr Kingston NY
    Nat'l Team:
    United States
    #171 Paul Berry, Jan 15, 2020
    Last edited by a moderator: Jan 15, 2020
    17 teams saw a drop in attendance in 2019. One was Minnesota, of the other 16, 13 saw falls of less than 1%. I think the additional weekday matches had something to do with that.

    Chicago and Columbus both raised the white flag and the league has taken action. The teams that worry me in 2020 are in Houston and Dallas, Colorado, and both New Yorks.

    Those of us that watch MLS regularly have witnessed a big improvement over the last 5 years but how do you convince the casual American or Canadian soccer fan of that? What are the benchmarks?

    As I see it they are, the success or otherwise of the MNT, MLS results in the CCL, and former MLS players in Europe. I think the level of angst we see on those 3 issues in these forums reflects that.

    All I can say is that thank God the words "Almiron" and "bargain" are no longer mutually exclusive.

     
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  22. scoachd1

    scoachd1 Member+

    Jun 2, 2004
    Southern California
    The economics courses I took were even more simplistic than your likely relatively simplistic response, but I'm pretty sure I got the points you tried to convey. To your point, the real world is much more complicated than simple models. With regard to soccer, there is a reason I limited scope to Europe and suppose I should have added for those with EU passports as any US player without one probably realizes.
     
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  23. tomásbernal

    tomásbernal Member+

    Sep 4, 2007
    Club:
    Portland Timbers
    Nat'l Team:
    United States
    Convincing the Euro-homer to watch (and, further, watch without immediate critical disdain) would require a verified catch of a rainbow unicorn. Maybe even a rainbow unicorn pegasus. Or probably 15 of them. Meanwhile, I'll enjoy the much better soccer I get to watch, year on year, and support the players in their collective bargaining efforts.
     
  24. Paul Berry

    Paul Berry Member+

    Notts County and NYCFC
    United States
    Apr 18, 2015
    Nr Kingston NY
    Nat'l Team:
    United States
    :thumbsup:
     
  25. Fighting Illini

    Fighting Illini Member+

    Feb 6, 2014
    Chicago
    I'll play the sock puppet here.

    8-9 years ago MLS was too jarringly inferior of a product compared to the (by that point easily accessible) Premier League for me to really get all that invested in it.

    That has changed in the last few years. It's markedly better soccer now, and I find myself more and more drawn to it as a league that's American where I can actually go attend the games.

    Now, the elite European game is still better, I now have very broad access to the Bundesliga and Serie A in addition to the Premier League, and at least in terms of the EPL, the games are better presented as a TV product. The early on the weekends timeslot also fits into open hours in people's lives really well.

    It's a competitive landscape for viewers, and in any event it's a smorgasbord of worthwhile soccer to watch, and in both respects that's a fan-friendly equilibrium, and beyond my wildest dreams as a 10-year-old.
     
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