MLS has sent a memo to its teams and league staff instructing them to prepare for a work break.
The memo, sent by MLS President and Deputy Commissioner Mark Abbott, arrives before January 29 (midnight, Jan 28) to negotiate a revised collective agreement (CBA) between MLS and the MLS Players Association. If the league moves forward with their threat to lock out players, it will be the first stoppage in MLS history.
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The memo, a copy of which was obtained from ESPN, states: “The January 29 deadline gives all constituents – the league, clubs and players – ample time to prepare for the coming season. At this point, we must allow for the possibility that the CBA will end and a work stoppage may occur, so we will be providing guidance to clubs later today on the rules to be followed during such work stoppages.
“We want to be clear – our hope is to reach an agreement and avoid a work stoppage. However, we must be prepared in the event that we cannot reach an agreement. We understand the challenges COVID-19 has created for families in the US and Canada, around the world, and in our MLS community. While we are under no obligation to do so, we plan to continue taking out health insurance and paying these premiums for the health of the players and their families in the event of a work break. “
An attempt to reach the MLSPA for comment was unsuccessful.
The two sides have been locked in CBA negotiations since MLS invoked a force majeure clause on December 29th. The clause gives the two sides a 30-day window of time after their appeal to agree on an amended CBA. The clause can be invoked in the event of an economic disaster such as one triggered by a pandemic. The league said it activated the clause because it feared the relatively slow roll-out of the COVID-19 vaccine will result in few fans being able to play games this season. Given MLS’s reliance on match day revenue, the lack of fans would weigh heavily on finances. The league said it suffered losses of nearly $ 1 billion in 2020, of which $ 725 million were due to the pandemic.
The MLSPA has countered the MLS’s assertion of force majeure out of “financial opportunism” rather than “financial necessity” and highlighted how the concessions made last June have played out over the coming years, including 2021 .
The resumption of negotiations marks the third time in the past year that both sides have been involved in CBA talks. The two sides reached an agreement in principle last February, but neither side officially ratified the deal. When the COVID-19 pandemic hit, MLS resumed negotiations, and the two sides agreed on a revised deal last June.
If the window closes without a new deal coming off, either side could choose to overturn the CBA, even though MLS is the side most likely to undertake such a maneuver. It is possible that discussions could resume after the deadline if both sides consider progress is being made.
MLS responded to the force majeure appeal with an offer to the MLSPA on January 5th. In exchange for no salary cuts, MLS urged players to freeze the growth of the salary cap between 2020 and 2021, extending the contract for an additional two years through the end of the 2027 season. MLS said the restructuring would cost over $ 100 million to $ 110 million over the league Save the life of the CBA. That would have been on top of the $ 150 million concessions stated by the MLSPA that the players made in June last year when the final CBA was settled. That deal also included a freeze on the salary cap from 2020 to 2021.
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The two-year extension would go beyond the 2026 World Cup co-hosted by the US, Canada and Mexico – a tournament that is hoped to accelerate investment in the game in North America. Because of this, MLS is hoping to cut its spending while MLSPA wants to be able to maximize its share of the loot.
Sources told ESPN that the MLSPA rolled back the league’s offer last Friday. In their counteroffer, the MLSPA is offering to change the amount of the salary cap in the coming years without mentioning the extension of the CBA.
The two teams then met on Monday night, and the league announced that it had made its own counteroffer to the MLSPA. Sources told ESPN that the league is sticking to its desire to extend the CBA for two years but would allow the salary cap to be increased faster in the later years of the deal. When the two sides agreed a CBA last February, the salary cap increased from USD 8.49 million to USD 11.64 million over the course of the five-year contract. This equates to an average increase of $ 630,600 per year.
Since the league invoked the force majeure clause, there have been different approaches to the pace of the talks. MLS has insisted that it needs to be more urgent as the window is due to close on January 29th, while MLSPA insists that the date is not a hard deadline.
A source knowledgeable of the situation said the league expects the MLSPA to submit another counter offer before the deadline.
The MLS training camp is slated to open on February 22nd. The regular season starts on April 3rd.