Should The CBA Be Renegotiated Early?

[James17930]

As most of you know, the current Collective Bargaining Agreement between MLS and the Player's Union expires after the 2009 season.

There have been calls for the league and the union to voluntarily open it up at the end of this season to address some issues that have been obvious problems this year, such as the size of the salary cap, the size of the senior roster, Superliga compensation etc. Some might say it would be best to try and solve these problems as soon as possible.

But, the other side of the argument would be that MLS is finally making money after 10 + years of losses; maybe they should wait as long as possible before spending more money (for of course those aforementioned changes would require much higher expenditures) and use these news profits to recoup some of the $350(?) million in loses that they've suffered since the inception of the league.

What do you think?

[Ron Manager]

I think the overall league finances are the big issue here. The league will only increase expenditure as it feels it is safe to do so. This is a good period for the league, but they will want to be sure good times are here to stay before they start shelling out big dough.
Even when they do re-negotiate, I doubt we will see the big cap increases we want. The league will be cautious and I respect that. it is the only reason they (and by extension we) are still around.
It would be nice to see an increase linked to profitability of the club as this would encourage better business practices by owners, but could also encourage serious gouging in ticket prices and ruin the parity the league enjoys at present.
Having said all that, the league needs to look at salary cap and roster size to ensure teams are competitive in other competitions (Siperliga and CONCACAF CL) and to ensure teams have the financial means to attract higher quality players.
These are tough issues an I am glad I do not have to make the choices.

[Ossington Mental Youth]

im all in favor of it, cant see how everyone wouldnt benefit from renegotiating asap

[rocker]

well they basically have to start talking this fall right?
cuz they can't wait until the end of the 2009 season.. they have enough problems trying to work out schedules, plus the draft and stuff, even when they start during the current season. i figure they gotta start talking this fall, and get something done by next summer or else the subsequent season is gonna be tough to work out.

[Dub Narcotic]

Do you have any evidence that the league is making a profit? I would imagine a few clubs are, but I'd be surprised if that is true about the league as a whole.

[RPB_Brantford_08]

Al they have to do is raise the amount for the guys making 17000 or so a year up to 50,000, let them earn a decent wage while still playing the game.

[TFCREDNWHITE]

Do you have any evidence that the league is making a profit? I would imagine a few clubs are, but I'd be surprised if that is true about the league as a whole.

Don Garber said it numerous times...Ever since Becks joined they are turning a solid profit.

And yes they should renegotiate this year...I think the CAP should be bumped up 35% from last year...Its feasable.

[CoachGT]

I think it pitiful that players in this league are paid less than $20k to play. At the start of the year, MLS magazine published a list of the most underpaid and overpaid players on each team. Guzan was listed at the top "low paid" keeper at $30k! Tell me he doesn't think he's won a lottery now! The current salary cap, even supplemented by allocation money, is far too low and developmental players can't earn a decent living - it is hard to understand why someone would want to earn a miniscule salary at a job that requires more than a 40 hour effort - you could make more money flipping burgers at McDonalds as a full time employee. This is what encourages players on the bubble, like Hemming, to see if they can earn a better living elsewhere - ask for a release so that you can see what else is available. Minimum salaries need to go up, as do the size of the roster and average salary for the league. It would be in the best interests of the teams to do so (so that they can be competitive both for talent and in tournaments like the CCL) and certainly in the best interests of the players!

[Oldtimer]

Garber mentioned a while ago (in the context of the Superliga payout) that they are already in discussions. Whether that will lead to an early agreement is anyone's guess (unless they are in on the negotiations).

[Billy the kid]

Anybody know if they've recouped that $350 million debt from their early years of operation. Those higher franchise fees didn't come in until later. We got in at $10 million.

Even if they negotiate a new agreement early, it won't take effect until the current one ends. I think negotiations will be ongoing for a long time.

[Ossington Mental Youth]

I really do hope that the cap gets raised, theres a higher minimum wage and a roster increase. Shit is necessary

[Roogsy]

The league has flexibility within the current CBA. Opening it up is bad business, but good for the sport. As a fan, I'd say open it. As a businessman, I know it's crazy to do so.

So at the end of the day, knowing that the could have and should have increased the salary cap more than the measly amount they did this year, I hope they send a message to the fans by increasing it by a larger amount for next season so that they don't have to open the CBA. If they give us a chinzy increase again, what do you think are the chances they would be inclined to open the whole darned thing?

[olegunnar]

well they basically have to start talking this fall right?
cuz they can't wait until the end of the 2009 season.. they have enough problems trying to work out schedules, plus the draft and stuff, even when they start during the current season. i figure they gotta start talking this fall, and get something done by next summer or else the subsequent season is gonna be tough to work out.

I agree that they should start talking this off season.
The league will have to have it's 2008 financials in order to make an informed decision. So any talk of starting now is pointless.
I think 2008's numbers will be interesting. Obviously the league is growing, but I think 2007 numbers will be a bit exaggerated because of the Beckham bump.

[Steve]

The league has flexibility within the current CBA. Opening it up is bad business, but good for the sport. As a fan, I'd say open it. As a businessman, I know it's crazy to do so.

So at the end of the day, knowing that the could have and should have increased the salary cap more than the measly amount they did this year, I hope they send a message to the fans by increasing it by a larger amount for next season so that they don't have to open the CBA. If they give us a chinzy increase again, what do you think are the chances they would be inclined to open the whole darned thing?

That's the whole point (and the whole problem). The cap was raised by such a small amount BECAUSE the CBA was running out. By keeping the cap low, the league gives itself a bargaining chip for the negotiations. If it prematurely raised the cap, it would put itself in a much worse position.

I say leave the CBA until the end of next season. Let the MLS have some profitable years, it will encourage the owners and allow them to spend some capital on their infrastructures. Once the CBA comes up, hit them with a large cap increase, increase the minimum, and go from there.

[Stouffville_RPB]

MLS can afford to do some changes, nothing to drastic. The league needs a 23 man roster, higher minimum salaries and an increased cap. If the league can charge $50 million now for a franchise it can afford to and should do these things.

[Dave67]

My guess is they will continue to take full value from the Beckham effect. Unless they feel teams can charge more by paying the players better I just can't see them raising the cap.

That said the cap needs to go up. Financially some of these players could do almost as well working at 7-11.

[Dub Narcotic]

I'd be shocked to see the cap go over 4.5 - 5 million. The money just isn't there. I think that would be a reasonable goal, with a $40-50k minimum salary, 20 man rosters and Canadians counted as domestics across the entire league. It's probably also time to think about a salary floor, which would force franchises to spend, say, $4M, to ensure a minimum level of competitiveness. That would also put pressure on the Columbus' of the league.

[Cashcleaner]

The CBA should be renegotiated ASAP with priority given to increasing the minimum salary and the distribution of prize money for extra-league competitions like Superliga, or Champions League. Negotiating the cap itself will likely take a lot more mediation so I say figure that out last and get the other two points done and over with first.

[Stouffville_RPB]

I'd be shocked to see the cap go over 4.5 - 5 million. The money just isn't there. I think that would be a reasonable goal, with a $40-50k minimum salary, 20 man rosters and Canadians counted as domestics across the entire league. It's probably also time to think about a salary floor, which would force franchises to spend, say, $4M, to ensure a minimum level of competitiveness. That would also put pressure on the Columbus' of the league.

I think $4 million is a fair increase. Isn't the cap currently at $3 million? I think 20 man rosters are too small if the cap is up 33%.

[olegunnar]

My guess is they will continue to take full value from the Beckham effect. Unless they feel teams can charge more by paying the players better I just can't see them raising the cap.

That said the cap needs to go up. Financially some of these players could do almost as well working at 7-11.

The cap is in place to keep the league in business.

The league needs to distance itself from 2007... draw it out. If the CBA would be renegotiated now, the players union could point to 2007 numbers (influenced by the Beckham bounce) and would say, look attendance is up 30% revenues are up off the charts you need to raise the cap pronto and you can afford it.
But the league knows it's a situation of diminishing returns, where the Beckham factor is wearing off and one day he'll go back to Europe, so it's in their best interests to have a year or two after 2007 so that the revenue and attendance numbers are more reflective of the growth of the league rather than the supernova of having Beckham come to the league.

[olegunnar]

Also I'm interested to see if the Single entity crap with every player having an MLS contract not a club contract, is a negotiated point in the new CBA.

[Fishnicker]

Do you have any evidence that the league is making a profit? I would imagine a few clubs are, but I'd be surprised if that is true about the league as a whole.

MLS is a single entity system - there are 12 investors who control 14 teams. These local owner/operators are primarily responsible for the stadium and running day to day operations of the club, but not player salaries (DP excluded). League takes care of overhead. At one point the league took 51% of the gate and concessions. That can't be the case now, but the economic model was set up specifically to counter what happened in the NASL. At the end of the year I would imagine each investor would split the profits proportional to their investment, and whatever you can scrounge up locally is gravy. So there shouldn't be that much difference if you broke it down club by club.

And while neither MLS or individual clubs release any financial data, it was believed to have finally gone in the black after the 2006 season.

[troy1982]

MLS is a single entity system - there are 12 investors who control 14 teams. These local owner/operators are primarily responsible for the stadium and running day to day operations of the club, but not player salaries (DP excluded). League takes care of overhead. At one point the league took 51% of the gate and concessions. That can't be the case now, but the economic model was set up specifically to counter what happened in the NASL. At the end of the year I would imagine each investor would split the profits proportional to their investment, and whatever you can scrounge up locally is gravy. So there shouldn't be that much difference if you broke it down club by club.


You also should add that each MLS investor gets a piece of SUM (soccer united macketing i think) which controls the world cup rights in the states aswell as runs he euro teams friendlies in North America. SUM generates alot of money for the mls owners. It was one of Garber's first idea's as commisioner, i believe, and it was because of SUM that MLS was able to survive some lean years.

I think the salary cap in the new CBA will go up by 1 million and the roster sizes to increase by 2 to 20.
And while neither MLS or individual clubs release any financial data, it was believed to have finally gone in the black after the 2006 season.

here is more info about sum if you want http://en.wikipedia.org/wiki/Soccer_United_Marketing



Soccer United Marketing is the marketing arm of Major League Soccer (http://en.wikipedia.org/wiki/Major_League_Soccer) and is responsible for the US English and Spanish broadcasting rights for the World Cup. This group's goal and role is to be an instrument of MLS that will help it gain the media exposure and credibility of other major US professional sports leagues, like Major League Baseball (http://en.wikipedia.org/wiki/Major_League_Baseball), the National Football League (http://en.wikipedia.org/wiki/National_Football_League), National Basketball League (http://en.wikipedia.org/wiki/National_Basketball_League) and the National Hockey League (http://en.wikipedia.org/wiki/National_Hockey_League). MLS owners all own a portion of Soccer United Marketing, which was purported to have made a profit for the league's owners in the first half of 2006. Since the company is privately owned, the company's private financial details are not disclosed to the public.
SUM negotiated the new Major League Soccer TV Rights Deals with ESPN/ABC, Fox Soccer Channel, Fox Sports en Espanol, Univision, and HDNet. The deals are rumored to be worth around 20 million dollars per year to the company. It is currently unknown whether any of the league's Canadian broadcasters pay a rights fee. Thanks to SUM, the MLS has also built close ties to the Mexican first division, which led to the creation of InterLiga (http://en.wikipedia.org/wiki/InterLiga), a 8 Mexican team tournament hosted exclusively on US soil and managed by SUM. SUM has also used this relationship to develop SuperLiga (http://en.wikipedia.org/wiki/North_American_Superliga), a competition between clubs of MLS and La Primera División (http://en.wikipedia.org/wiki/La_Primera_Divisi%C3%B3n) of Mexico.
It is hoped by the company's founders that this company will one day build soccer into one of America's top sports. SUM previously undertook the responsibility of producing the league's various games. The deals together represent the first time in American history that a domestic professional soccer league was able to command TV rights fees.

Founded in 2002, Soccer United Marketing (SUM) is the preeminent commercial soccer company in the United States. SUM holds the exclusive rights to the most important soccer properties in the nation, including: all commercial rights to Major League Soccer; the United States Soccer Federation and all men's and women's national teams; promotional and marketing rights to Mexican National Team (http://en.wikipedia.org/wiki/Mexico_national_football_team) games on U.S. soil; and marketing, promotional and broadcast rights to the prestigious eight-team Mexican club tournament - InterLiga. In addition, SUM holds the English-language broadcast rights in the U.S. to the 2006 FIFA World Cup (http://en.wikipedia.org/wiki/2006_FIFA_World_Cup). SUM managed the marketing and promotion of the CONCACAF Gold Cup (http://en.wikipedia.org/wiki/CONCACAF_Gold_Cup), the region's premier soccer tournament for national teams, and the highly successfully Real Madrid (http://en.wikipedia.org/wiki/Real_Madrid) American Tour in July, 2005. This extensive list of holdings is represented by SUM's slogan: One Sport. One Company.

[troy1982]

I'd be shocked to see the cap go over 4.5 - 5 million. The money just isn't there. I think that would be a reasonable goal, with a $40-50k minimum salary, 20 man rosters and Canadians counted as domestics across the entire league. It's probably also time to think about a salary floor, which would force franchises to spend, say, $4M, to ensure a minimum level of competitiveness. That would also put pressure on the Columbus' of the league.

Canadian will never be counted as MLS domestic unless US labour laws are changed, which i don't think is happening anytime soon.

[Oldtimer]

At one point the league took 51% of the gate and concessions. That can't be the case now

Both correct. The RSL stadium proposal papers filed with the local government showed that the league had reduced their take to 1/3 when they rejigged things after Garber took over as commissioner and they jettisoned the two money-bleeding clubs. Reducing it was necessary in order to attract new investors.

[Oldtimer]

Canadian will never be counted as MLS domestic unless US labour laws are changed, which i don't think is happening anytime soon.

Actually the main barrier is not US labour laws, but rather the USSF refusing the leagues proposal to count Canadians as domestic. FWIW, the USL counts Canadians as domestic, as did the NASL.

[Fort York Redcoat]

Yeah, I want these guys to get what they are worth but to do so in the midst of expansion seems a bit of a strain on the league.

[troy1982]

Actually the main barrier is not US labour laws, but rather the USSF refusing the leagues proposal to count Canadians as domestic. FWIW, the USL counts Canadians as domestic, as did the NASL.

No it is labour laws as a U.S. company can not favour one foriegn national over another for a job, so therefore canadians can't be treated any different than other soccer players from other countries.