Before it could be ratified, COVID happened. The league and club owners took advantage of the opportunity to force the players back to the table during the summer to re-negotiate some of terms.
MLS Commissioner Don Garber threatened to lock out the players during the pandemic if they didn’t agree to terms that would allow the season to re-start with the tournament in Orlando. As part of those negotiations, the owners wanted a force majeure clause. They got it and enacted it following the conclusion of the season — one in which the league estimated it lost approximately $1 billion in revenues — in December. Thus, the two sides were forced to negotiate a CBA for a third time. The CBA just agreed to includes a force majeure clause.
The new CBA will go through the 2027 season — the owners’ biggest sticking point in just-finished negotiations — in exchange for the players not receiving salary cuts this season. It was a but of a dubious olive branch because the players agreed to salary cuts last season and salaries are frozen this season.
The league released financial details for the next few seasons.
MLS Player Compensation
An overview of player compensation for the new CBA.
Teams will have a total available spend of $9.2 million this season (same as last season) and increasing incrementally each season until it reaches $13 million in 2027. The total doesn’t include revenues derived from the re-negotiated media rights deal expected ahead of the 2023 season. That percentage will start at 12.5 for the 2023 season and increase to 25 for 2027. GAM allocations within the available spend will start at $1.525 million for this season and increase incrementally to $3.921 million in 2027. TAM will start at $2.8 million and decrease to $2.025 million in 2027.
That roster spend doesn’t include certain classifications of players, including Designated Players, which will remain capped at a maximum of three per roster, and on as many as three players that qualify for the league’s Under-22 Initiative.
The Maximum Salary Budget Charge will start at $612,500 this season and increase incrementally to $883,438 in 2027. The Senior Minimum Salary will start at $81,375 this season and increase incrementally to $125,875 in 2027. The Reserve Minimum Salary will start at $63,547 this season and increase incrementally to $97,700 in 2027.
The bonus pool, which was reduced for the 2020 season, will also be back to 100 percent to reward players for performances in tournaments and other actionable events such as team wins, playoffs, etc. Senior players can receive as much as $35,000 and Reserve players as much as $53,000 in annual bonuses.
Additionally, the two sides agreed to a more relaxed standard for free agency. Starting in the 2026 season, players 24 and older with at least four years of MLS service at the end of their contracts are eligible to become free agents within the league. In the CBA negotiated last year, it was five years of service.
And free agents can reap some of the financial rewards. Players who are making the maximum salary budget charge or less, a free agent can sign a contract with another club with an initial salary of the greater of $25,000 above the maximum salary budget charge, or 20 percent more than the player’s prior salary. For players making between the maximum salary budget charge and the maximum targeted allocation money (TAM) amount, the player could earn 20 percent more than the prior salary to as much as $500,000 above the maximum salary budget charge and 15 percent of such salary from $500,000 above the maximum salary up to the maximum TAM amount.
Teams can also take more charter segments in 2022 through 2027. In 2022, teams can take as many as eight legs, increasing to 10 in 2023, 12 in 2024, 14 in 2025, 16 in 2026 and 18 in 2027. All flights are expected to be chartered this season to minimize the risk of COVID.
“We thank the MLSPA leadership and the players for their thoughtful and collaborative approach on the new CBA,” Garber said in a statement on the league’s website. “We worked together to address the ongoing impact of COVID-19 on the League, and we appreciate the players’ efforts to develop a CBA that deals with the uncertainty of the pandemic while also providing stability during the next seven years to enable further growth. We look forward to seeing the players on the field in a few weeks as we launch the 2021 season.”