New MLS CBA was never going to be perfect, but there’s a lot to like

Thursday was a big day for MLS: it, along with the MLSPA, announced a new collective bargaining aggreement set to take effect for the 2020 season and run through the end of 2024. And it was wrapped up with weeks to spare, as opposed to the previous one in 2015 that was approved just days before the start of the season.

And there’s a lot to unpack.

I wanted to take a little bit of a deep dive into some of the key points of this new CBA as best I could. Keep in mind that 1) I’m not an expert in this in any way and 2) as time goes on, we should get a little more clarity on what some of these rules mean. Hopefully I explained it in a way that makes sense.

New player compensation rules (TAM, GAM, minimum salaries, etc.)

Under the new CBA, clubs will have a minimum of $6,425,000 in 2020 it must spend across its roster, which is the salary budget for $4.9 million plus $1.525 million in GAM clubs are given. Those numbers increase to a $6.425 million salary budget and $3.093 million in GAM in 2024, giving each club $9.518 million it must spend that year.

The new twist is that instead of the $1.2 million in TAM each club received in 2019 plus $2.8 million in TAM that was considered discretionary, all TAM is now discretionary and the amount each club will get will drop on an annual basis, starting at $2.8 million in 2020 and going down to $2.125 million in 2024. Also, the increased GAM, up from $200,000 per club in 2019, can be used on any player. So that’s good news for clubs if they want to give a raise to a specific player as they don’t need to dip into TAM to do so, leaving TAM to bring in players outside the league that don’t quite command a DP salary. (tl;dr: what was once TAM is gradually being transitioned to GAM.)

It’s important to look at what now qualifies as a “TAM salary” under the new CBA; simply put, it’s the maximum salary budget charge for a player plus $1 million. So, this year, that number is $1.612 million, so any player that makes between $612,000 and $1.612 million is considered a TAM player. The max budget charge will increase from year to year; in 2021, it will be $651,250, climbing to $683,750 and then to $743,750 before capping out at $803,125 in 2024.

Finally, minimum salaries increase under the new CBA, with the senior minimum set at $81,375 in 2020 and growing to $109,200 in 2024 and the reserve minimum moving up to $63,547 in 2020 and topping out at $85,502 in 2024. That’s not a bad deal, especially for homegrown players and draft picks just coming into a first team contract. And those number could grow by up to $35,000 (senior minimum) and $53,000 (reserve minimum) in bonuses if several performance threshholds are met.

The perfect solution for the players, as stated by MLSPA executive director Bob Foose, would have been a complete abolishment of TAM, but it’s good to see the union and the league compromise in this area. That being said, the point has been made that the rules are still confusing (especially to casual fans), so a little more transparency in this department would have probably been helpful. Then again, every league has rules that are difficult to wade through if we’re being honest.

Free agency

Here’s the bit that’s received a little pushback from a few fans that I’ve seen on Twitter. The old free agency system required players to have 8 years of service in MLS, be 28 years old or older, and be out of contract or had their contrct options declined. The sticking point was that clubs could sign no more than 2 players that were out of contract. Under the new CBA, the 28/8 rule has been scaled back to 24/5 and clubs can now sign unlimited free agents as long as they abide to several mechanisms put in place regarding how much such players can be paid, which MLS has on its website.

I think the main pushback from fans pertains to how much a free agent can be paid; a skilled young player entering the league at around 16 or 17 will be able to make between 15% more than his previous salary and $25,000 more than the max budget charge. That all sounds good, but it comes with a few caveats: a) a player wouldn’t be able to qualify until he’s 24, even though he would have far surpassed the 5 years of service rule; and even with a free agent theoretically able to make well over 6 figures, that would push him into the lower fringes of that TAM territory, which a club almost certainly wouldn’t want to use for that purpose if it could help it. (Also, a really good homegrown player, i.e. an Alphonso Davies, wouldn’t be around long enough to reap the “benefits” of an expanded MLS free agency if they’re able to make hand over fist more overseas.)

And that’s just for players who make the max salary charge or less. For those that make between the max salary charge and the max TAM amount (max salary charge plus $1 million), a free agency-eligible player could make as little as 15% more than his previous salary up to $500,000 more than the max salary charge, but those cases might be slim.

So free agency, in its revamped form, is still a little sticky as it pertains to how much a player can potentially make vs. how much he realistically will be making on an FA deal, but the fact that more players can qualify for it and are basically guaranteed, at minimum, a 15% raise, is a win overall.

(One final note: it appears that the Re-Entry Draft might be gone, which fans will miss like a head cold in the winter.)

The modified designated player rule

Gary A. Vasquez-USA TODAY Sports

The only thing that changes here is that a player signed to a club’s 3rd DP slot can only make up to the max TAM salary, unless he is 23 or younger, in which case the cap is removed. This not only promotes a bit of a level playing field across the league and controls spending (i.e. a club can’t load up on 3 big-ticket DPs), but it encourages clubs to identify younger, rising players from outside MLS with an eye toward eventually selling them at a profit. (I like to think of this as the “Atlanta United rule” as this is exactly what Atlanta did with Miguel Almiron and hopefully can do with Ezequiel Barco.) I’ve seen some disagree with this move, but I think it’s effective in that it continues to help MLS do away with its “retirement league” reputation; that being said, I can see why it looks like some clubs are being handcuffed.

Media revenue sharing

One of the big talking points surrounds revenue sharing for players derived from the next media rights agreement. While the 4 major sports - the NFL, NHL, NBA and MLB - have had this in place for years, a league like MLS, which has been around for a quarter-century and was nowhere near it was when the previous CBA was ratified in 2015, had not yet adopted one.

That changes with the new CBA: clubs will divide an amount set at 25 percent more than what MLS generates in media revenue in 2022, plus $100 million. (I’ve heard a few confilcting reports about how that would exactly look, but that should become clear once the CBA is voted on and ratified.) One thing is clear: it’s in the best interest of everyone involved to seek as agressive a media rights package as possible, as doing so will not only will MLS’s exposure increase domestically, but will benefit the clubs by having that much more money in their war chest.

Mandated chartered flights

This was a drum that was being beaten on a regular basis throughout the 2019 season, and there was no way that under the new CBA that it wouldn’t be addressed. Thankfully, it was, as clubs will now have a framework to work with starting in 2020 when they will be mandated to use 8 “travel legs” per year on charter flights. That number grows to 10 next season and increases by 2 each following season up until 16 in 2024. Postseason charters are covered by default.

The thinking here is that clubs obviously won’t need to charter a flight for every single away match, but certainly would for longer-distance trips or for quick turnarounds. For example, Atlanta United have a home match against Toronto FC on May 27 but will head out West to take on the San Jose Earthquakes just 3 days later, so that scenario makes perfect sense to fly on charter. Also, the gradual increase, rather than in one fell swoop, sounds like a provision for smaller clubs to budget in the future. Arthur Blank practically prints money so this wouldn’t be an issue for him, but for smaller ownership groups, it puts the squeeze on a little more. But the players got what they wanted here.

So there’s your mile-high view of the new CBA. Again, there are a few things that need work, but in the end, it’s good to see the player’s union and the league compromise and get this nailed out. It’s a win for the fans because there’s no need to worry about a potential work stoppage, meaning business as usual for 2020.

What are your thoughts? Any other concessions that you feel weren’t addressed well enough or at all? Let us know down in the comments.