The 2014 MLS season is finally underway. Teams and players have put in the work in the off-season, and made changes that they hope will propel them to the top of the league come December. MLS has also made some changes – to its roster rules.
The most notable of these changes came in the area of salaries and budgets, at least in the set of rules that are posted on mlssoccer.com that are made available to the public. For the 2014 season, clubs have a new salary cap of $3.1 million, which is up from the 2013 cap of $2.95 million by 5.1%. This means that without accounting for variance in individual player salaries, the league is investing on average $155,000 per player, versus $147,500 in 2013, assuming every team claims the 20 available “Salary Budget Players”. Clubs may elect not to fill the full 20 roster spots and can choose to field an 18 man squad but will be penalized should they not meet this requirement: “a minimum salary budget charge will be imputed against a team’s salary budget for each unfilled senior roster slot below 18.”
With an increase in salary budget also comes an increase in actual minimum and maximum wages. The minimum salary for a first team player in 2014 is $48,500, up $2,000 or 4.3% from 2013. The maximum first team player salary is $387,500, which is up $18,750 or 5.1% from 2013. Bear in mind that these figures, especially with regard to maximum salary, only represent what MLS pays the players and do not include any further contributions from club ownership to player salaries. This comes into play more with the Designated Players (DPs) who make considerably more than the average MLS player, as most are aware. Each club is still given 2 DP roster spots and has the option to buy a third for a one time fee of $150,000 that is dispersed amongst the clubs in MLS that do not have 3 DPs in the form of allocation money.
The original salary cap when the league started is estimated to be about $1.135 million, with a maximum player salary of $175,000 (this was prior to the DP rule, enacted in 2007). If we look at how that figure has grown to the now $3.1 million in 2014 in the league’s 19th season it is an average increase of approximately $103k per year. What does this mean for the league’s future? MLS Commissioner Don Garber has made it clear that the vision for the league is to get to 24 teams by the year 2020. If we use the average increase in budget to project out to 2020 that would mean the salary cap could potentially be in the range of $3.72 million. This would mean that MLS’s total salary budget as a league would go from $58.9 million (19 teams x $3.1 MM) in 2014 to a budget of $$89.3 million in 2020 (24 teams x $3.72 MM). Assuming the same 20 man roster as mentioned previously, and without accounting for individual player salary variance as before, the average player salary investment from the league would be $186,000 in 2020.
At the rate of the growth of price tags on top talent in the global player market the industry has seen over the last couple of years, this estimate may in fact turn out to be rather conservative if MLS wants to be able to compete with the elite leagues of the world. Or, perhaps the salary cap estimate is not conservative, and the league will call upon its owners to invest more out of pocket to cover the additional salary that big names now require. Perhaps the immense spending that we saw from Toronto FC this offseason is just a sign of things to come in MLS that will be considered the norm in just a few years.