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Negotiations between MLS and the MLS Players Association surrounding player compensation continue, with salary cuts, a force majeure clause and revenue sharing among the sticking points.
With the league shut down since March 12 due to the coronavirus pandemic, MLS has been engaged with the MLSPA regarding economic concessions. While the two sides agreed on a framework for a new CBA last February, neither side ratified the agreement, giving MLS an opening to engage in talks.
Sources confirmed to ESPN that the league delivered its latest proposal to the MLSPA on Friday, a development that was first reported by the Sports Business Journal. The Athletic reported that one source characterized the offer as “manageable for the MLSPA.”
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MLS declined to comment while the MLSPA didn’t respond to a request for comment.
Sources told ESPN that the league is asking for a 10 percent salary cut, along with other economic concessions. The proposed pay cut that would be across the board, with the expectation that the cut will amount to about $20 million in savings for the league, and would only be applied to the rest of current year’s wages starting on a date to be determined.
The SJB also reported that the MLS proposal contains the first draft of a force majeure clause. One source told ESPN that players will be asked to sign an addendum to their contracts putting the clause in place for 2021.
The proposal also asks the MLSPA to delay by one year a revenue sharing agreement based on a new domestic broadcast rights deal scheduled to begin in 2023. The CBA terms agreed upon in February stipulated that 25% of the net increase in media revenue that exceeds $100 million above 2022 levels (pre-new deal) will flow into salary budget and General Allocation Money on a per team basis. The league’s proposal indicates that this revenue stream would only kick in for 2024, the last year of the CBA, instead of starting in 2023.
Sources told ESPN that the MLSPA is in the process of putting together its own counter proposal to the most recent MLS offer, and is contemplating a compromise pay cut of 7.5 percent. The union is also pushing back on the force majeure clause as well as the delay in the revenue sharing. In a bid to keep more money in the players’ pocket, the MLSPA is also discussing a clause by which mandatory 401k contributions would be reduced. The MLSPA also wants to delay the start date of the salary cuts to kick in after a proposed mini-tournament in Orlando set to start some time in July.
Earlier this week ESPN reported that the MLSPA had offered just over $100 million in financial concessions. Sources confirmed a report from The Athletic that stated the offer included a 5 percent cut in 2020 salaries, 5 percent in salary deferrals for the same year. A source also told ESPN that the offer included a $5 million cap on bonuses, which would affect such items as team win bonuses, senior and reserve roster player bonuses for making game day roster, starting or making an appearance. The salary bumps specified in the CBA that was agreed last February would also see the terms agreed to for 2020 remain in place for 2021, with 2021’s original terms delayed until 2022, and so on until the agreement ends in 2024.
ESPN reported on May 11 that MLS had offered the players a 20 percent salary cut across the board for the remainder of the 2020 season, plus additional unspecified reductions in overall compensation that would run into the tens of millions of dollars. That offer was made after MLS floated an offer of a 50 percent pay cut as it pertained to the entire 2020 payroll, with players under $100,000 not affected.
The negotiations come as MLS is trying to negotiate return-to-play scenarios with the MLSPA. With some teams still not able to begin individual workouts due to local stay-at-home orders, the league has proposed sending all 26 teams to Orlando, Florida, and holding the aforementioned mini-tournament that would be composed of a group stage and knockout rounds. The teams, players and staff would head to Orlando in early to mid-June and be sequestered for around 10 weeks. The first month would see the teams train, with games taking place after that.
The players have balked at the notion of being separated from their families for upwards of 10 weeks, especially with some partners either pregnant or caring for children. Players have also expressed concerns about testing capacity and safety.