Player’s Strike Could Win the Battle But Lose the War for Soccer in North America

Many Americans may not be aware of the elephant in the room of American sports.  It is not LeBron James’ contract, Alex Rodriguez’s reinstatement, or deflated footballs.  Only one week remains until opening day of Major League Soccer’s twentieth season and the players and owners have yet to come to an agreement on a new collective bargaining agreement (CBA).  Arguably the most anticipated season in MLS history may not happen due to a work stoppage.  While the legal issues being discussed may be similar, this is far different from other player strikes that have (almost) taken place in football, basketball, and baseball.

What’s at stake for the owners?

MLS owners have invested quite a bit of money into the fledgling league, some from the beginning in 1996.  The league has yet to turn a profit but has made incredible strides to put itself in a position to do that soon.  The two issues at hand in this CBA are player salaries and free agency.  MLS owners, like other business owners, recognize that salaries are the largest expense, and will strive to keep them low.  Some accommodations will likely be made and the issue may already be resolved.

The larger issue is free agency.  Because MLS is a single entity structure, the league technically signs and owns all player rights.  This structure was designed to level the competition on the field and in the books.  The owners recognized early on that the success of the league depends on its weakest link.  One or two failing teams could lead to decreased fan interest across America and Canada, and thus cut profits across the league.  The single entity structure has prevented teams with large spending power from cannibalizing smaller teams and dominating play based on the ability to sign the more talented players.

Single entity has also kept owner-operators fiscally responsible.  Some of the largest teams in Europe such as Manchester United, Barcelona, Real Madrid, and Chelsea have spent beyond their means on star players at times.  The ability for players to test free agency in Europe has caused massive bidding wars among European clubs for top talent.  Some players do not perform as expected once they sign a large contract which leaves clubs with a low return on investment.  MLS owners will want to prevent those types of bidding wars within the league for players, some even questioning the viability of having free agency.

If the players do strike, the owners will take a large financial hit.  Money will still be needed to keep stadiums and organizations operating while games are not being played.  Front office salaries and other expenditures will need to be paid with no revenue coming in from matchday.

The credibility and image of the league may be hurt as well.  The league has focused on increasing quality on the pitch and making it a desirable destination for foreign players.  A work stoppage would put a halt to that progress, or even regression when the issue is resolved.  This season also marks landmark television deals with Fox Sports, ESPN, and the UK’s Sky Sports.  It is imperative for the league to continue play, especially with the introduction of two highly regarded expansion teams, NYCFC and Orlando City SC.

What’s at stake for the players?

The legal claims that the players are making in negotiations for the CBA have been well documented.  Players claim the restriction of free agency is a violation of workers’ rights and could be challenged in U.S. courts.  The players may very well win a drawn out legal battle.  In other American sports where a strike has occurred, the salaries of even the lowest paid players might sustain them during a work stoppage since other athletes are paid more in those major sports.  The minimum MLS salary is less than $20,000 over the poverty line.  Most MLS players would have to find alternative places to play to earn a wage during a work stoppage depending on the time it takes to resolve the issues, or find other employment to sustain them.

Since soccer is a global game it would be easier for players to find a place to play than perhaps a football player or a baseball player.  Most baseball players or football players would not be paid nearly the same amount if they played in another country.  However, the market value for MLS players, particularly Americans who are not fully developed players, is not great.  MLS players looking for work in other leagues may not find it or they might not receive the same compensation they would in MLS.

The players are also invested in growing the game in the United States.  A strike would bring the growing interest in the league to a complete stop.  Fan interest could decrease, revenues fall, and thus players have weaker negotiating power in the future.  North American sports fans have a history of resentment towards money battles in sports.  Players might win the battle but lose the war.

What will likely happen?

All signs thus far point to no work stoppage.  Negotiations have fallen short but all parties are preparing for the start of the season.  Players and coaches have gone through preseason.  The league has continued promotions and each club has plans for opening day.  Both players and the league have much to lose by not playing, especially in the first year of a new television contract and with interest in soccer at an all-time high.  Most likely the players will play under the expired CBA while negotiations continue.

The fates of players, the league, and the future of soccer in America are deeply intertwined.  The league’s rebrand will not be for nothing.  Whether there’s an agreement in place or not, the “Next” chapter of MLS will be written.

 

Reporting on the business side of the world's game.