Article by Matt Lichtenstadter
By far the biggest question looming over the 2020 MLS offseason was the construction of the new CBA. Many elements fundamental to the league and its system were up for negotiation, and there was no real sense of where the league and the MLSPA might go and who would budge.
Both parties have agreed to a new five year deal in far less acrimonious fashion than the last two agreements, and both sides have gone for evolution, not revolution. Teams will be spending more than ever before, and there will be more player movement than ever before. But the fundamentals of the league; single-entity, the salary cap, league owned contracts will still be ever-present and the league’s tightly controlled growth model continues, though looser than before. What does this mean for the league and its ambitions in an important new decade?
Some of the major changes to the league’s model comes in the form of mandatory spending. With some changes in the definitions of GAM and TAM, teams will be required to spend more money on their rosters than ever before. While the overall amount of money teams will be able to spend will not increase dramatically, they will be able to spend it more freely than before. Mandatory TAM, a $1.2 million pool of money only used on players of a certain salary level, will now be converted into GAM which can be used anywhere on any kind of player. Combine that with expanded free agency (now aged 24 or five years of MLS service), a rise in base salaries for league minimum players plus an improved bonus structure and it’s easy to see why players would be pleased with this deal.
The next big marker for MLS will be the new media deals they sign to start in 2023. With an important change in the CBA, a cut of that can be put back into the salary pool across the league that will increase the overall salary budget as well as potential GAM going forward. It may not be a big number in the larger scheme, but it would be big considering mandatory roster spends by 2024 will only be just north of $9 million. Getting a piece of that pie is critical because now the league and its players will be pulling in the same direction when it comes to media deals going forward.
MLS owners did get some key concessions elsewhere. Teams will still be allowed to sign three DP’s, but for the third DP, the league is allowed to limit their pay up to the maximum TAM salary ($1.61 million), unless that player is under 23. In essence, this means that a DP lineup of Michael Bradley, Jozy Altidore and Sebastian Giovinco from 2015 might not be possible anymore. MLS wants to become a selling league, and this restriction of DP signings helps in their view to achieve this goal. They’re also going to add an under-22 player initiative which will encourage teams to sign players under age 22 with a reduced budget charge to bring more of them into the league, along the lines of young DP’s before. Good teams can maximize scouting networks and player development into transfer fees, which theoretically can be put back into the system to repeat the cycle, even if this comes at the expense of signing higher priced stars.
MLS has always been a league predicated on slow evolutionary growth, cautious and fearful of past soccer leagues in the United States and how their stories ended. That caution has allowed the league to survive multiple crisis periods and reach the stage it is at now but has also hampered its attempts to achieve its own ascribed goals. It will not be one of the five best leagues in the world by 2022, and by many definitions it is not a selling league yet either. It is,however, closer to these goals than ever before. No longer will players on the back end of MLS rosters have to pick up another job to pay rent, and teams will be spending more money than ever before, increasing the quality of player and play in the league. But did the league take as big a step as it could have?
The jury is still out. MLS’ rulebook is still arcane, and there are restrictions designed to prevent runaway spenders from dominating the league. But with every CBA, there is more flexibility added to the system and that will make the league better. With the World Cup in 2026 as an important benchmark looming over the horizon, the league needed to take a step forward and it did with this new CBA.
It could have taken more, and perhaps riskier, steps forward. But in tune with its past and its core ethos, the league chose measured growth as the way forward. Time will tell whether MLS can meet its goals using that approach in this important decade to come.
