Every year, the Major League Soccer Player’s Union (MLSPU) releases the salary information of all MLS players that receive a salary from an MLS club. The salary data for 2015 was released just last week by the MLSPU. This year in particular is an important year for evaluating this data since the players negotiated a new collective bargaining agreement (CBA) with the league office just days before the start of the season.
Under the new CBA, the minimum salary was raised from $36,500 to $50,000, which represented an important step for many players. Research suggests, as does common sense, that it is important to pay people enough where they do not have to worry about money and can focus on their work. Athletes are no exception. Raising the salary of these players allows them to put their focus into training. Below is the number of players in 2014 that made below $50,000 by club.
Only 162 players out of 571 players made less than $50,000, and they accounted for $7,591,000 of the $57,561,923 total guaranteed salary of players in 2014 – or said another way, 28% of the players accounted for 13% of the total salary. In 2015, only 42 players of 828 players are paid at league minimum. Their salaries account for only $2,100,000 in base salary.
These numbers are very telling of the effect that the new CBA had. This shows that either clubs gave raises to many of their players so that they are now paid above the league minimum or the league only helped a small portion of players in the new CBA.
Those that follow MLS closely know that this increase in players’ salary also coincided with an increase in the amount that teams are allowed to spend on players as per the MLS Roster Rules. This shows in the MLSPU data as well. The below table outlines the total salaries paid by each club in 2015 and the % change from 2014.
With the exception of Dallas, Montreal, New England, New York Red Bulls, Portland and Seattle, all other clubs spent more money compared to 2014. Some might believe this is likely caused by the increase in the minimum salary thanks to the CBA. But as noted earlier, only 28% of players made below $50,000 in 2014. The increase needed to get those players at or above the new league minimum is not enough to drive the total league salary growth exhibited above. The influx of high profile Designated Players (players that may be paid large amounts of money but only have a portion of their salaries count toward the salary budget) in the past year, however, does.
Clubs are beginning to spend more with the increase in the number of teams as well as the likely increase in revenue to the league from a large television deal with FoxSports, ESPN, and Univision.
One last important change that was negotiated in the new CBA was that roster spots would be decreased from 30 to 28. Below is a chart that shows the number of players that are on the books for each club in 2015 versus 2014.
Notice the change in the number of players on the books is not very noticeable. Teams are forced to spend more money on fewer players, in an effort to free up more salary dollars per player in order to help retain talent, which is also the aim of the new MLS roster rule regarding “Targeted Allocation Money” that was announced recently by the league.
The impact of the new CBA is slightly muddied with the addition of two new clubs in NYCFC and Orlando City SC, new roster rules, and some very big name – and big money – signings that all have led to the increase in total salary versus 2014. MLS clubs continue to build out their rosters with varying strategies and changing roster rules, which continue to illustrate the very structured – and often times confusing – financial environment in which the league monitors with a watchful eye to try and ensure steady and stable growth.