MLS releases details of the new CBA

Salary cap jumps more than 10%, new "re-entry draft" instituted

On Tuesday afternoon, Major League Soccer released the most
poignant details of the recently announced collective bargaining agreement
between the league and the players union.

“We had three very important objectives," MLS commissioner Don Garber said in a teleconference on Tuesday. "We needed to have a plan that would allow us to reduce our losses that would allow us to be able to be profitable league-wide, and to grow our attendance and grow our TV ratings. We needed that agreement to be able to achieve all three things.”

The agreement, according to a release from the league, is still subject to the approval of the MLS board of governors and the players.

The most interesting details of the new five-year deal
concern the financials, including a 10.15% increase in each team’s salary
budget, and loosened restrictions on player movement within the league. Minimum salaries are increasing to $40,000, and younger "development players" will now make more than before.

A
so-called “re-entry draft” does not allow for full-blown free agency—one of the
players’ main points of contention during negotiations—but does allow more
freedom to players out of contract or whose contract is terminated.

"Frankly, I give the union credit for thinking about this
concept of a re-entry draft that would capture all these players," Garber said. "We all know
we don’t have enough noise in the offseason. Now we have a system prior to the
SuperDraft that will give us something we think is interesting and exciting."

When asked about how the deal will affect the Designated Player rule, Garber stated the topic was not part of the discussions, but admitted that other changes will be coming later this season. He suggested the DP rule might be opened to include more than one per team. 

"It’s in all of our best interest to ensure that we have star players in this league to grow our attendance and ratings in a mechanism that makes sense," he said. "It’s possible we might increase the number of designated players [per team]. We haven’t gotten there yet, but it makes sense that we try to achieve that."

Here are some of the CBA’s details spelled out:

TERM: 2010 – 2014.

GUARANTEED CONTRACTS: The CBA provides for guaranteed
contracts for all players who are at least 24 years old with three years of MLS
service. The majority of the players in the League will have guaranteed
contracts each season.

SALARY BUDGET: An increase of the salary budget from $2.315
million per club in 2009 to $2.55 million in 2010 (10.15%) and an increase of
5% per year thereafter.

An increase of the minimum salary for senior roster players
from $34,000 in 2009 to $40,000 in 2010 (17.64%) and an increase of 5% per year
thereafter.

PLAYER MOVEMENT: While there will be no bidding by MLS clubs
against each other for out-of-contract players, the League will establish a
“re-entry draft” for players who are out of contract. Although the specific
parameters of that draft are being finalized, it will address players in each
of the following categories:

Option Not Exercised

  • A player who is at least 23 years old with three years of
    MLS service and whose option is not exercised will be placed in a re-entry
    draft and made available to all clubs at his option salary.

Contract Terminated

  • A player who is at least 22 years old with one year of MLS
    service and who is asked to take a pay cut after contract termination will be
    placed in a re-entry draft and made available to all clubs at his current
    salary.

Contract Expires

  • A player who is at least 30 years old with eight years of
    MLS service and whose contract has expired will be placed in a re-entry draft
    unless his team makes him a qualified offer that must be at least 105% of his
    last salary. If placed in the re-entry draft, the player will be made available
    to all clubs at a salary equal to 105% of his last salary.
  • A player who is at least 25 years of age with at least four
    years of MLS service whose contract has expired will be placed in a re-entry
    draft unless his team offers him a base salary of at least as much as the base
    salary paid to him in the last year of his contract. If placed in the re-entry
    draft, the player will be made available to all clubs at a salary equal to the
    salary in the final year of his contract.

OPTIONS IN PLAYER CONTRACTS: A limit on the number of
options in player contracts to two for players who are at least 25 years old
with four years of MLS service. Contracts for all other players may have up to
three options.

For players whose annual compensation is less than $125,000,
the minimum increase in base salary will be 10% for players who play in at
least 66% of his club’s games and 12.5% for players who play in at least 75% of
his club’s games.

PLAYER BENEFITS: The CBA includes a package of benefits that
include increases in 401K contributions by the League, appearance fees, per
diem when travelling and relocation expense reimbursement. Among the additional
player benefits in the CBA are full health care benefits for every player and
his family at no cost, 401(k) contributions and expanded insurance benefits.

BONUSES FOR WINS AND EXHIBITIONS: The CBA includes a package
of bonuses for wins in MLS games and international tournaments as well as
appearance fees for international exhibitions.

GROUP LICENSE: The League and Players Union reached
agreement on an extension of the Group License that will run through 2015 (a
year longer than the CBA).

RESERVE DIVISION: MLS and the Players Union will establish a
joint committee to study the re-launch of a Reserve Division. In the event the
rosters are expanded, the salary for those players will be a minimum of $31,250
with additional annual increases.