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MLS Collective Bargaining negotiations: Where things stand (Part II: Compensation)

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As you might imagine, players are looking for a significant boost to the salary pool and really want to get rid of TAM.

FBL-QAT-FIFA-CLUB-WORLD-CUP-MONTERREY-LIVERPOOL Photo by KARIM JAAFAR/AFP via Getty Images

This is the second part of a five-part series exploring the main issues surrounding the ongoing MLS CBA negotiations. Other parts can be read here.

Compensation (salaries)

Part II of our look at the issues animating the MLS Collective Bargaining Agreement negotiations will focus on salaries, both minimum salaries and Target Allocation Money.

Background: If you can, think back to the dark ages of MLS in 2008. David Beckham was just about to come into the league making boatloads of money, while his teammates were making do carpooling to KFC to split a 20-piece. The minimum salaries back then were around $10,000, and many players had to work side-jobs just to make ends meet. Fortunately, things are much better as the league prepares to ink its third CBA since 2010.

Current agreement: The senior minimum salary increased by just over $10,000 between 2015 and 2019:

2015: $60,000
2016: $62,500
2017: $65,000
2018: $67,500
2019: $70,250

The reserve salary started out lower ($50,000) and increased incrementally to $56,250, which is at least a livable salary in most parts of the country.

What the Union is looking for: You can probably guess. More money. “To be a league of choice, we need to have players choosing to come here, and that means they need to be compensated at an appropriate and fair market value,” said Minnesota United midfielder Ethan Finlay in a MLSPA release.

What MLS is looking for: Cost control and cost certainty. Stop me if you’ve heard this before.

Chances of an agreement: Fairly decent, at least as to salary minimums. There is usually a decent bump in the first year of a CBA, followed by modest (5%) increases year-to-year. You’ll probably see the same thing here. Honestly, this is probably the low-hanging fruit in the compensation component.

Compensation (TAM)

Background: This is where we could see some difficulty in reaching an agreement. It’s one thing to haggle over minimum salaried players; it’s quite another to agree to major changes on the big-budget components of the league. And more importantly, changing how the league maintains control over those expenditures.

A lot of this goes back to the 2015 CBA. While the union was able to secure a limited form of free agency and increases in wages, the overall increase in salaries (and thus the salary budget) was not what most expected. To that point, shortly after the CBA was agreed to, MLS instituted Targeted Allocation Money, which effectively increased the salary cap by nearly half in order to increase the quality of players. While most believe the TAM system was successful, it was not particularly accessible to the rank-and-file MLS player (multiple players had TAM deals rejected by the league for one reason or another).

For the uninitiated, TAM allows teams to “buy down” players making between the minimum DP threshold of $530,000 and $1,500,000 to below that DP minimum, which allows the team to sign additional quality players to raise the level of play on a team — and league. Previously, MLS as a league has maintained a tight grip on what types of players (mostly foreign) teams can sign with TAM, though to be fair, more domestic players have been able to access those dollars recently (Miles Robinson, Paxton Pomekal).

Current Agreement: There is no agreement per se. The TAM initiative operates outside of the CBA. Thus the owners can add, subtract or remove TAM entirely at their whim.

What the MLSPA wants: For TAM to be loaded into a rocket and fired into the sun. That’s only a slight exaggeration. The union really HATES TAM. I mean, hates it. In my own discussions with Executive Director Bob Foose, one of his main priorities is to see TAM done away with. “TAM is silly, teams are fully capable of signing players themselves,” Foose said. “If they’re not, they should suffer the consequences. It needs to go away.

“It [TAM] is a bad word in our vocabulary.”

What MLS wants: From what I’ve gathered, there is something of a split on the issue of TAM. The league believes it’s been an extraordinarily successful program, and it’s hard to argue that the quality of the league hasn’t increased. Thus, one would question why the league would want to give it up. That said, folks like Paul Tenorio have talked to GM’s who hate dealing with these mechanisms. So this seems to be more of a league control issue over spending per se.

Chances of an agreement: Hard to say, but I’m still less optimistic that MLS will agree to give up control, but perhaps a convincing argument from the respective MLS Front offices and union will sway them. The simple solution would be for the league to transfer the money used on TAM to the salary budget and let teams spend how they see fit. Again, I’m not sure I’ve seen any evidence the league is willing to do that right now.

Part III (Budget Rules) to come...