Soccer newsletter: Winners and losers in the new MLS deal

Hello, and welcome to the L.A. Times’ soccer newsletter. I’m Kevin Baxter, The Times’ soccer writer, and we start today with the freshly minted collective bargaining agreement approved Monday by the MLS board of governors and the players union.

The deal clears the way for MLS training camps to open later this month and the regular season to kick off in early April — although there were indications Monday both dates could be pushed back slightly. The league promised individual team schedules will be released shortly.

A week ago in this space, I told you the labor talks would not end well after the league twice threatened to lock the players out if a deal wasn’t reached. And just because a deal was reached, that doesn’t necessarily guarantee a happy ending.

For starters, the deal marked an overwhelming victory for the owners, who strong-armed the players into agreeing to the seven-year deal the league insisted on and also got the OK to freeze salaries at 2020 levels for two more seasons. In exchange, the players — who had threatened to fight but instead surrendered — will receive their full pay this season after giving back more than $100 million worth of concessions on salaries and bonuses last season in light of the COVID-19 pandemic.

The players also got modest changes to free agency in the final two years of the deal.

In the end, though, it was the league’s promise to make those 2021 paychecks whole again that appeared to carry the day. Oh, and its promise the players won’t be locked out. At least not now.

But stay tuned, because the force majeure clause, which the league invoked in December to force the union back to the bargaining table, can be implemented again ahead of next season.

A force majeure, a common contractual clause, basically frees both sides from obligations they agreed upon in the event of an extraordinary crisis such as a global pandemic. MLS, which threatened a lockout to get the clause inserted into the CBA in June, invoked its language in December to reopen negotiations, then threatened a lockout again to accelerate the talks that led to Monday’s agreement.

There’s no reason to think the league won’t consider a lockout again next winter, because MLS believes the COVID-19 pandemic represents an existential threat.

The league gets the vast majority of its revenue from game-day sales and sponsorships, and the pandemic not only shortened its season to 23 games in 2020 but also forced most teams to play before either empty stadiums or limited crowds. As a result, the league’s total attendance was just 637,020, according to Soccer Stadium Digest; Seattle and Atlanta United each drew that much by themselves in 2019.

The outlook isn’t good for this year either, with public health officials estimating it could be late summer or early fall before anything resembling a crowd is allowed back for live sporting events.

That set off alarm bells in the league’s New York offices.

“I don’t think any business could sustain the kind of impact we sustained in 2020 for two years in a row,” said Commissioner Don Garber, who has said COVID-19 cost the league nearly $1 billion in lost earnings last season.

So Garber approached the latest CBA talks, the third in 13 months, as if the league’s future depended on them.

The union had an even worse hand to play — especially after the league threatened a lockout. Because while playing before empty grandstands would cost the owners revenue, the prospect of a lockout would rob the players not only of their livelihood but also of their best bargaining position. Without fans clamoring to get back in the stadium to see their teams play live, the union had no way to exert pressure on the owners.

In fact, a lockout might have been in the owners’ best interest because if the teams had no player payrolls to meet, it might have proved wiser to keep the stadiums empty and the lights off.

There was one issue the players appeared firm on, however, and that was the length of the agreement. All previous CBAs had lasted five seasons, but the owners wanted seven this time in an effort to manage expenses and recoup the money they lost to COVID-19.

Last month, the union compromised, proposing this deal extend through 2026. The date was significant: With the World Cup coming to North America in 2026, MLS is banking on the boost in attention and spending the event will bring to soccer in the United States and Canada. The union wanted the current labor agreement to end that season, hoping the tournament would provide leverage heading into talks for a new deal, which would begin that summer.

In the end, the union gave in.

The league was clearly dealing from a position of strength, and it pushed that advantage. Its ownership group includes several billionaires, including Stan Kroenke, whom Forbes says is worth $10 billion; Clark Hunt ($2 billion); Phil Anschutz ($10.1 billion); Robert Kraft ($6.9 billion); and the Abu Dhabi-based City Football Group. Collectively, the league’s owners can probably withstand a couple of lean years.

That’s not the case with the players — nearly 30% of whom made less than $80,000 in 2019, the last season for which the union’s salary figures are available. So after making huge concessions in salaries and bonuses in 2020, they couldn’t afford more cuts, much less a walkout, during a pandemic.

As a result, they swallowed hard and voted in favor of immediate reward, accepting a deal that pushes most gains far down the road.

The players did get a slightly better free-agency deal beginning in 2026, when players 24 years old with four years of MLS experience will become eligible; the current threshold is five years in MLS. They will also share in profits from a new media contract, but since the current one doesn’t expire for another two seasons, that money won’t be coming until 2023.

Meanwhile, the salary cap of $4.9 million and maximum budget charge of $612,500 remain stuck at 2020 levels for two more years before increasing in the final five seasons of the agreement.

For Steven A. Bank, the Paul Hastings professor of business law at UCLA and a close observer of soccer finances, the length of the deal makes it hard to figure.

“What the parties were fighting for were things so far in the future and generally based on speculations that it’s hard to assign them a value,” he said. “What unites the two sides is both bet on the future prospects of the league.”

The league, understandably, refrained from spiking the football and thanked the players.

“We have enormous respect and appreciation for everything the players have done helping build the league and the sport throughout the years, and they’ve gone above and beyond during the pandemic,” Garber said in a statement, even though his actions repeatedly belied those sentiments.

“We thank the MLSPA leadership and the players for their thoughtful and collaborative approach on the new CBA. 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 training field in a few weeks as they begin preparations for the upcoming season.”

The union, in its statement, made no similar gesture of thanks to the guys who stole their lunch money. After talking tough, then eventually caving, it focused instead on thanking its members.

“MLS players have made incredible sacrifices and overcome considerable challenges in the past year to continue doing their jobs during a difficult time for all of us,” the statement read. “We owe a tremendous debt of gratitude to our player leadership for continuing to guide us during these unprecedented times.”

Summary of key points

The following are key points agreed upon by MLS and the MLSPA in the new CBA:

TERM: Feb. 8, 2021, to Jan. 31, 2028

MLS Player Compensation

An overview of player compensation for the new CBA follows below.

(Major League Soccer)

* Clubs have the opportunity to exceed these figures with spending on up to three designated players and up to three players through the league’s under-22 player initiative.

• As was the case in the CBA agreed to in June, players also will share in the increased revenue generated by MLS’ new media agreements beginning in 2023. MLS will increase player spending by an amount equal to 12.5% of the incremental media revenue, as defined in the CBA, in 2023 and 2024, increasing to 25% for the 2025, 2026 and 2027 seasons. The league’s current local, national and international media rights partnerships expire at the end of 2022.

• Team bonuses and 401(k) contributions will remain as agreed to in the previous CBA.

• The maximum a club can be charged for an individual player on the team’s salary budget increases from $612,500 in 2021 to $883,438 in 2027:
  2021: $612,500
  2022: $612,500
  2023: $651,250
  2024: $683,750
  2025: $743,750
  2026: $803,125
  2027: $883,438

• Minimum salaries for players on the senior roster increase from $81,375 in 2021 to $125,875 in 2027.

• Minimum salaries for players on reserve roster increase from $63,547 in 2021 to $97,700 in 2024.

Free Agency

• Under the most recent CBA, to be eligible for free agency a player needed to be 24 years old and have five years of service in the league. Beginning in 2026, the eligibility has been expanded to include players who are 24 years old with four years of service in the league.
  

European invasion, by the numbers

No matter how you do the calculations, the American invasion of European soccer this season is far greater and far more successful than anything we’ve seen to date. Paul Kennedy, the National Soccer Hall of Famer who is editor of Soccer America, is much better at math than I am, so I’m going to let him break down the numbers — although you can check his work here.

There are 34 Americans on clubs in top 10 leagues, Kennedy says, half of whom are not yet 21. And that doesn’t include U.S. national team players Paul Arriola and Jordan Morris, who last week joined Swansea City but are not listed in Kennedy’s survey because the Swans play in the second-tier Championship, which is not a top-10 league.

Thirteen of the players on the list are at clubs in position to qualify automatically for the 2021-22 Champions League. A record nine Americans have already played in the Champions League this season.

Here’s where the 34 men on Kennedy’s list are playing:

Spain (La Liga)

Barcelona: Konrad de la Fuente, Sergiño Dest

Valencia: Yunus Musah

England (Premier League)

Chelsea: Christian Pulisic

Wolverhampton: Owen Otasowie

Fulham: Tim Ream, Antonee Robinson

Manchester City: Zack Steffen

Italy (Serie A)

Juventus: Weston McKennie

Roma: Bryan Reynolds

Germany (Bundesliga)

Leipzig: Tyler Adams

Wolfsburg: John Brooks

Eintracht Frankfurt: Tim Chandler

Schalke: Matthew Hoppe

Borussia Dortmund: Gio Reyna

Hoffenheim: Chris Richards

Werder Bremen: Josh Sargent

Borussia Monchengladbach: Joe Scally

France (Ligue 1)

Lille: Tim Weah

Portugal (Primeira Liga)

Boavista: Reggie Cannon

Netherlands (Eredivisie)

Ajax: Alex Mendez

Heracles: Luca de la Torre

PSV: Richie Ledezma

Heerenveen: Uly Llanez

Emmen: Desevio Payne

Belgium (Pro League)

St. Truiden: Chris Durkin

Waasland-Beveren: Joe Effort

Brugge: Ethan Horvath

Kortrjik: Brendan Ike-Hines

Genk: Mark McKenzie

Anderlecht: Matt Miazga

Austria (Bundesliga)

Salzburg: Brenden Aaronson

Wien: Erik Palmer-Brown

Admira Wacker: Andrew Wooten

And finally there’s this….

The first of Zlatan Ibrahimovic’s two goals in Milan’s 4-0 win over Crotone on Sunday was the 500th club score of his career. Fifty-three of Ibrahimovic’s goals came with the Galaxy, and, among active players, only Lionel Messi (650) and Cristiano Ronaldo (661) have more. In addition, the brace was his sixth of the season, matching Ronaldo for the lead among players in Europe’s top five leagues. With 14 goals on the season, Ibrahimovic, 39, is tied for second in Serie A behind only Ronaldo, who has 14. ... With a 1-0 win over Brazil’s Palmeiras on Sunday, Mexico’s Tigres advanced to Thursday’s Club World Cup final against reigning European champion Bayern Munich (beIN Sports, 10 a.m.). ... The Galaxy remain interested in bringing back winger Cristian Pavón from Argentina, although the longer the complicated talks with Boca Juniors drag on, the less likely a deal becomes. Training camp starts later this month, and with the Galaxy under a new coach in Greg Vanney, Pavón needs to be in camp from the start. ... Manchester City equaled an English top-flight record when Sunday’s 4-1 victory at Liverpool gave it 14 straight wins in all competitions. Preston did it first in 1891-92, followed by Arsenal in 1987. City can break the record Wednesday when it plays away to Morris and second-tier Swansea City in the fifth round of the FA Cup.

Podcast

Don’t miss my weekly podcast on the Corner of the Galaxy site as co-host Josh Guesman and I discuss the Galaxy each Monday. You can listen to the most recent podcast here.

Quotebook

“It’s a tough time. It’s a tough time for all of us. And I’m sure for our supporters at home as well. It’s easy to believe when it’s going well. Now we have all together to show character. I will make sure that the team will do that, and I would be pleased if our fan base could do that as well. ... If you’re only really united when you’re winning, there is something wrong with you.”

Liverpool coach Jurgen Klopp after Sunday’s loss to Manchester City, which dropped the defending champions 10 points off the Premier League lead