Diving into the MLS CBA
Workers of the World Unite
A few notes before I say anything else.
I wanted to write about the CBA, but I was worried that such a dry topic wouldn’t be well-received. To make it more interesting, I came up with a nuanced and satirical concept that I thought worked quite well.
But it turns out that you people are Philistines, who have trouble understanding things that you read.
So instead of wasting my time and creative energies crafting something thoughtful, I’m just going to spoon-feed you some literal facts, since that’s all that you can handle. To clear up any doubt – I mean exactly what I say here, and there is no subtext or gimmick.
Last year, MLS and the Players’ Association (“MLSPA”) negotiated a new Collective Bargaining Agreement (“CBA”). In fact, they negotiated it twice.
First, in February 2020, the two sides reached an agreement. Before that agreement was ratified, however, COVID-19 hit and MLS started to cancel games. The owners went back to the players for more concessions. In particular (and what was reported), the owners wanted the players to take a large pay cut across the board and they asked for a “force majeure” clause. The proposed force majeure clause would have been tied to attendance, and it would have allowed the owners to cancel the CBA if 2020 attendance fell significantly below 2019 – something that was virtually certain to occur.
Ultimately, the players took a smaller pay cut and agreed to a different form of the force majeure. Exactly what that clause says is a mystery – there has been some reporting on it, but (as far as I can tell) the current CBA is not publicly available. The prior CBA is on the MLSPA website, but it did not contain any force majeure clause.
Predictably – in the sense that it was predictable that the national plan to “do nothing” had not made COVID-19 go away – MLS invoked the force majeure clause in late 2020. Despite the fact that we were promised that Biden’s election would make everything better, but so much for unity I guess.
MLS Commission Don Garber has claimed that MLS lost approximately $1 billion last year due to the pandemic. Of course, we have to take his word for it because, like the CBA, MLS’s finances are not publicly available.
On January 21, Garber wrote a letter to MLS fans expressing his regrets that the MLS Cup had been canceled without crowning a champion. He also explained that MLS and the MLSPA had met, and that owners had offered to pay 100 percent of salaries in 2021 in exchange for a two-year extension of the CBA. He wrote that “MLS ownership takes the risk and financial losses from the pandemic this year . . . [but gets] an opportunity to earn back some of that financial loss in the future.”
The next day, at around 7:45 p.m. on a Friday, MLS sheepishly put out a statement regarding its ongoing negotiations with the MLSPA. The statement said simply that the MLSPA “provided a response to the League’s proposal” and that the MLS would “respond promptly” to that counteroffer.
The MLSPA has painted MLS’s position as “opportunistic,” suggesting that MLS is cynically using the pandemic to renegotiate the CBA and funnel millions of dollars to themselves on the back end. In particular, the proposed extension would push the CBA through 2027. The players (in my view rightly) believe that the league will experience significant growth leading up to the 2026 World Cup, which will be held mostly in the United States. In addition, MLS is due to sign a new broadcast deal after the 2022 season. MLS owners are attempting to delay any salary increases from those negotiations until two seasons after the World Cup, and five years after the next TV deal is signed. Garber himself said that he expects the proposed CBA extension to save the league at least $100 million.
MLSPA head Bob Foose has downplayed the relevance of any losses from last year. He has taken the position that the 2020 losses were already accounted for when the players renegotiated the CBA and accepted the salary cuts. In addition, the union has pointed out that MLS loses money every year anyway, so MLS would have incurred much of the loss even without the pandemic. (By the way, nearly 20 percent of players contracted COVID-19 in 2020.)
Yesterday MLS went ahead and announced key dates including the start of preseason camps and the opening date of the regular season. All as a negotiating tactic.
Now, questions remain regarding whether the owners will lock out the players and whether the negotiations or pandemic will affect the start of the 2021 season (as an FC Cincinnati fan who wants a DP Number 10 and a full stadium, I hope to hell that it does). More importantly, fans need to know: Who should you be rooting for in this dispute? Here are some facts that, hopefully, will help you decide.
What is the Impact on MLS Expansion?
In 2021, MLS welcomes its 27th team, Austin FC. The next three teams have already been selected. Sacramento and St. Louis each agreed to pay a $200 million expansion fee. The 30th team, Charlotte FC, will pay a record $325 million expansion fee. There are no reports that any of these three teams have asked for a reduced fee or backed out of expansion due to the effects of COVID-19.
In 2019, the average MLS franchise was estimated by Forbes to be worth $313 million. This is despite the fact that, year after year, MLS clubs are not profitable – and are not expected to be profitable. So why are people knocking down the door to get in the league?
Jorge Mas, a co-owner of Inter Miami FC, said (as reported by Yahoo), “I think of the MLS 25 years from now, we’ll be Premier League-ish, if we want to call it that on the metrics that leagues are measured by.” In the same report, the CEO of Nashville SC is quoted as saying, “Every metric you see almost, it grows every year. If you continue on that track, you have to believe you catch up with those bigger leagues in Europe.”
Yes, the pandemic has delayed the entry of these last three teams by a year. But MLS still expects to be paid on time.
How Does MLS Compare to Other Leagues Around the World?
It is commonly believed by fans that MLS is gaining on the world’s top leagues, and the quotes from the executives above support that. But by some measures, MLS has already caught up. According to Forbes, the 20th most valuable soccer club in the world, Newcastle United, is worth $381 million. Recent reporting of a potential sale of Newcastle United put the market price at around 300 million pounds, or just over 400 million dollars – not too much more than Charlotte’s expansion fee.
Newcastle United’s player wage bill is approximately $76 million a year, and it has spent about $122 million in transfer fees over the past two seasons.
Based on a valuation from a recent buyout of former minority owner Vincent Tan, LAFC is worth $700 million. In 2019 (the most recent year for which data is available), LAFC’s annual guaranteed compensation to players was $13,162,193. Over the last two seasons, LAFC has paid just over $18 million in transfer fees.
Meg Whitman’s purchase of a stake in FC Cincinnati valued the team at $500 million. FC has spent just over $2 million in transfer fees this offseason, after its second consecutive wooden spoon.
Pain on Both Sides
As mentioned above, players took reduced salary for the 2020 season. In addition, numerous MLS teams announced layoffs of non-player employees. But ultimately, the risk – and therefore the biggest hit – is borne by the owners, right? Eh, maybe not.
Like all US sports leagues, MLS counts among its owners the wealthiest people in the world. (Also, Goggle Soccer United Marketing.) Some examples:
Meg Whitman, a managing owner of FC Cincinnati, saw her net worth rise from $3.3 billion in April 2020 to an estimated $6 billion at the time of writing. This occurred in the same year as the colossal and highly publicized failure of her app, Quibi.
Arthur Blank, owner of Atlanta United, has seen his wealth grow from $4.6 billion in April 2020 to $6.3 billion at the time of writing.
Jimmy Haslam (Columbus Crew): From $2.7 billion to $2.9 billion.
Joe Mansueto (Chicago Fire): From $2.8 billion to $5.4 billion.
John Fisher (San Jose Earthquakes): From $2.1 billion to $2.9 billion (which makes him a Bay Area proletarian).
David Tepper (soon to be Charlotte FC): From $12 billion to $13 billion.
“Emanuele (Lino) Saputo & family” (which includes CF Montreal owner Joey Saputo): From $3.8 billion to $5.2 billion.
“Martha Ingram & Family” (which includes Nashville SC lead owner John Ingram): Held flat at $4.4 billion, so cut them some slack. (DID YOU KNOW: One of Martha’s sons, David, runs Ingram Entertainment, an independent company that distributes DVDs and videogames. The family sells DVDs, in 2021, and still didn’t lose any wealth during a global pandemic.)
Just for fun, let’s add that Merritt Paulson (Portland Timbers) is the son of Hank Paulson, a former Chairman and CEO of Goldman Sach’s and the United States Secretary of the Treasury during the 2008 financial crisis. The elder Paulson was the architect of the 2008 bank bailout (known as the “Paulson Plan”), with the lion’s share of the funds going to his former employer, Goldman Sach’s. The United States government is a single entity structure, and the Wall Street banks are its investor-operators.
Spencer Richey’s guaranteed compensation in 2019 was $71,666.88, for the entire year.
What is the Point of All This?
A self-evident truth: Human beings are unique among animals on earth.
An argument: What defines us as humans is our self-awareness, our reason, our ability to think beyond simply eating and breeding. A religious person might call this a soul. Whatever you call it, it is an undeniable thing that makes people different from animals but alike to each other. Because of this, the most human thing that we can do is to use our reason. To ponder our existence, our place in the world.
To do so requires leisure. Leisure, therefore, is the highest human experience.
Leisure, as a concept, traces back to the Creation, as God rested on the seventh day. Religious people celebrate this rest day as the Sabbath; Jesus said, “The Sabbath was made for man.” To rest. St. Augustine wrote of the concept of “holy leisure,” the ability to be free of everyday obligations and devote one’s time to study and prayer. For secular people (like me), Aristotle called leisure “the goal of all human behavior, the end toward which all action is directed.” And Aristotle distinguished relaxation – done for a respite from work – from true leisure, which is done for its own sake.
It is necessary for most of us (although not for most MLS owners) to sacrifice some amount of leisure to exist in the modern world – this is called “working.” While a job can support our humanity by affording us space and time to enjoy our leisure, serving as the action directed toward the end of leisure, it is nevertheless important to recognize that a job primarily reflects the base animal needs of food and reproduction. A job is not a part of our humanity; a beaver has a job.
Those who seek to take away our leisure are depriving us of our humanity, and this is an act of violence.
Anything Else to Know?
NYCFC is owned by City Football Group, which is majority owned by the Abu Dhabi United Group, the Abu Dhabi Royal Family’s private equity company.
The United Arab Emirates (whose capital is Abu Dhabi) is currently engaged in an ongoing armed conflict in Yemen, a co-leader of a coalition “that is implicated in war crimes and other serious violations of international law” according to Amnesty International. Amnesty International also has documented several cases where individuals were “arrested without warrants, held incommunicado for weeks or months and tortured or otherwise ill-treated.” UAE laws recognize “a husband’s rights over his wife,” which require her “courteous obedience to him,” and a married woman’s rights to work and leave the house are restricted. “[A] husband’s discipline of his wife” is “considered an exercise of rights.” Hospitals are required to report pregnant, unmarried women to the police, for referral to prosecution or deportation.
Sacramento’s ownership group is led by Ron Burkle, a billionaire investor. Burkle famously was a close friend of former President Bill Clinton. After his presidency, Burkle’s company paid Clinton at least $15 million for work as an “advisor.” The two regularly traveled together on Burkle’s private 757, affectionately called “Air [Reproductive Act] One” by Burkle’s employees. When asked later exactly what President Clinton did at his company, Burkle said, “If you try to figure out what he did, he really didn’t do anything.” In addition, Burkle’s name was allegedly in Jeffrey Epstein’s black book, and in December 2020 he bought Michael Jackson’s Neverland Ranch.
And that’s all without getting into Chiquita Banana, formerly owned by the Lindner Family. See, Chiquita was originally founded as United Fruit Company and –
Uh, nothing, in particular, of note, ever happened.
Is that It?
Yeah, that’s it. Let’s sign a DP Number 10.