Major League Soccer & MLS Players Association Reach Agreement on New Five-Year CBA

Major League Soccer & MLS Players Association
Reach Agreement on New Five-Year CBA
New CBA Finalized More Than Three Weeks Prior to the Start of the League’s 25^th Season
WASHINGTON, D.C. & NEW YORK -
(February 6, 2020) – Major League Soccer (MLS) and the Major League Soccer Players Association (MLSPA) today announced that they have reached an agreement in principle on the terms of a new collective bargaining agreement. The agreement, covering five seasons, commencing with the 2020 season and continuing through the 2024 season, is subject to the approval of the MLS Board of Governors and the membership of the MLSPA.
Completed more than three weeks prior to the league’s 25
^th
season, the new five-year CBA continues the tremendous momentum behind the sport of soccer in the United States and Canada.  The new agreement includes:

• Increased investment in player spending;
  
• Greater flexibility for clubs to use those new resources across the entire roster;
  
• Player spending to include a share of MLS’ new media rights deals in 2023 and 2024;
  
• A substantial increase in charter flights by the end of the term;
  
• Expanded free agency.
  

“As we prepare to celebrate our 25
^th
season, we are very pleased to finalize a new five-year Collective Bargaining Agreement with our players,” said MLS Commissioner Don Garber. “This agreement addresses key strategic priorities for the league and our players while also retaining the basic player compensation structure that has been the foundation for the growth and stability of Major League Soccer.  We had constructive, positive discussions with the leadership of the MLSPA and the players’ bargaining committee during the negotiations over the last few months and I would like to thank them for their collaboration in concluding an agreement that will serve as the foundation for a new era of partnership with our players.” 
SUMMARY OF KEY POINTS
The following are key points agreed upon by MLS and the MLSPA in the new five-year CBA:
TERM:
  February 1, 2020 – January 31, 2025
INCREASED INVESTMENT IN PLAYER SPENDING:
  MLS will increase investment in the salary budget, General Allocation Money and performance bonuses for players, raising the spending power per club every year, from $8,490,000 in 2019 to $11,643,000 in 2024.  In addition, the minimum annual salary for senior roster players will increase each season to $109,200 in 2024 and 401(k) contribution and other benefits also will increase with the new CBA.
GREATER SALARY BUDGET FLEXIBILITY ACROSS ROSTERS:
  During the last three MLS seasons, clubs were provided an additional $1.2 million per season in Targeted Allocation Money (TAM) to be used for the acquisition or retention of players within a specific salary budget range. Under the new CBA, that $1.2 million per season has been converted to General Allocation Money and may be used across the entire roster.  Additionally, with the increase in the amount of guaranteed spending across the entire roster during the next five seasons, the amount of Discretionary Targeted Allocation Money per season will decrease correspondingly.
PLAYERS TO SHARE IN MEDIA REVENUE FOR THE FIRST TIME:
  For the first time, player spend per club will include a share of the increased revenue generated by MLS’ new media agreements in 2023 and 2024.  Beginning in 2023 and 2024, MLS will increase player spending by an amount equal to 25% of the increased media revenue above the amount generated by the league in 2022 plus $100 million. The league’s current national and international media rights partnerships expire at the end of 2022.
CHARTER FLIGHTS INCREASE SUBSTANTIALLY:
  Clubs will be required to use charter flights for eight legs of travel during the 2020 regular season, growing to 16 legs for the 2024 season.  In the previous CBA, clubs had the discretion but not the requirement to charter up to four legs per season.  In addition, clubs will be required to use charter air travel for all Audi MLS Cup Playoff matches and Concacaf Champions League games involving international travel.
EXPANDED ELIGIBILITY FOR FREE AGENCY
: The eligibility criteria for free agency has been expanded to include players who are 24 years or older and have five years of service in MLS. This lowers the age and term from the previous CBA, in which players 28 years old with eight years of service were eligible for free agency.  The CBA includes caps on the increases in compensation in free agent contracts.
In addition, players making above the maximum salary budget, including Designated Players, will now also be eligible for free agency based on specific guidelines.
DESIGNATED PLAYER SPOTS
: Clubs will continue to have the right to sign up to three Designated Players in the new CBA. 
More details regarding the new MLS Collective Bargaining Agreement can be found below.  
ABOUT MAJOR LEAGUE SOCCER
Headquartered in New York City, Major League Soccer – celebrating its 25
^th
Season in 2020 – features 26 clubs throughout the United States and Canada.  In addition, four more expansion teams -- Austin, St. Louis, Sacramento, and Charlotte – will begin play within the next two years. For more information about MLS, visit
www.MLSsoccer.com
.      
ABOUT THE MAJOR LEAGUE SOCCER PLAYERS ASSOCIATION
The Major League Soccer Players Association, headquartered in Bethesda, Maryland, is the exclusive bargaining representative for all Major League Soccer players. For more information about the MLSPA, log on to its website at
www.mlsplayers.org
.
Contact:               
Dan Courtemanche                                                                                          
MLS Communications: (212) 450-1225                                                        
dan.courtemanche@MLSsoccer.com
www.MLSsoccer.com

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MAJOR LEAGUE SOCCER COLLECTIVE BARGAINING AGREEMENT – ADDITIONAL DETAILS
While the entire contents of Major League Soccer’s Collective Bargaining Agreement will be available following ratification by MLS owners and MLS Players, additional details follow below. 
MLS Player Compensation

• Player compensation is divided into two categories -- Guaranteed Spend (Salary Budget and General Allocation Money) which each club is required to spend and Discretionary Spend (Designated Players, Discretionary Targeted Allocation Money, and investment through the new under-22 player initiative).
  

Note: Beginning in 2020, all amounts of Targeted Allocation Money are discretionary and may be used to acquire or re-sign a player whose salary and acquisition costs are between the maximum salary budget charge and the maximum salary budget charge plus $1,000,000.Thus, in 2020, players who fall within the range of $612,500 and $1,612,500, for salary plus acquisition costs, will qualify for these discretionary TAM funds.
An overview of player compensation (excluding discretionary spending on Designated Players and spending as part of the under-22 player initiative) for the new CBA follows below. 

*Clubs have the opportunity to exceed these figures with spending on up to three Designated Players and, beginning in 2021, up to three players through the under-22 player initiative.
Maximum Salary Budget Charge

• The Maximum Salary Budget Charge, the maximum a club can be charged for an individual player on the team’s salary budget, increases to $612,500 (from $530,000 in 2019) and grows to $803,125 in 2024.    
  

Year                Maximum Salary Budget Charge 
2020                $ 612,500
2021                $ 651,250       
2022                $ 683,750
2023                $ 743,750
2024                $ 803,125 
Senior Minimum Salaries

• Minimum Salaries for players on the senior roster increase to $81,375 (from $70,250 in 2019) and increase to $109,200 in 2024.
  

Reserve Minimum Salaries:

• Minimum Salaries for players on reserve roster increase to $63,547 (from $56,250 in 2019) and grow to $85,502 in 2024.
  

Designated Players

• Clubs will continue to have the ability to sign up to three Designated Players.
  
• The league will have the right to limit the compensation for the third Designated Player to the maximum TAM Salary, unless the player is 23 years old or younger, in which case there will be no limit.
  

Free Agency

• Under the most recent CBA, to be eligible for free agency a player needed to be 28 years old and have eight years of service in the league.  Under the new CBA, the eligibility has been expanded to include players who are 24 years old with five years of service in the league.
  
• The new CBA also changes the increases in compensation that free agents can earn:
  
  • For players making the maximum salary budget charge or less, a free agent can sign a contract with another club with an initial salary of the greater of $25,000 above the maximum salary budget charge, or 15% above the player’s prior salary.
    
  • For players making between the maximum salary budget charge and the maximum TAM amount, the player could earn 15% above the prior salary up to $500,000 above the maximum salary budget charge and 12.5% of such salary from $500,000 above the maximum salary up to the maximum TAM amount.
    
  • Designated Players, whose total compensation in the year before free agency was equal to or less than the maximum TAM amount will be eligible for free agency, subject to the compensation limits for players making between the maximum salary budget charge and the maximum TAM amount set forth above.
    
  • Designated Players whose total compensation in the year before free agency was greater than the maximum TAM amount will be eligible for free agency either as a non-Designated Player with his new team, or as a Designated Player with his new team subject to the criteria set out below.
    
    • If the player signs as a non-Designated Player, his initial salary may be up to the maximum TAM amount.
      
    • If the player signs as a Designated Player, the player will negotiate compensation level and contract term with MLS;
      
      • The player may re-sign with his prior team at the salary amount and contract term negotiated with MLS;
        
      • If the player was earning from the maximum TAM amount up to $3,000,000, the player may sign with another MLS team as a Designated Player at an amount equal to 10% less than the salary amount negotiated with MLS.
        
      • If the player was earning above $3,000,000, the player may sign with another MLS team as a Designated Player at an amount equal to 15% less than the salary amount negotiated with MLS.
        

New “Under-22” Player Initiative Beginning in 2021

• Beginning in 2021, MLS will have the discretion to allow clubs to sign up to three players who are 22 years old or younger with a reduced budget charge.
  
• More details regarding the new initiative will be provided at a later date.
  

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