Posted by: stan chelney | February 15, 2010

History Suggests That Free Agency Is Unlikely To Result From MLS Collective Bargaining Talks

With the current Major League Soccer collective bargaining agreement set to expire on February 25, 2010 (as twice extended), it is now clear that one major issue stands in the way of an agreement: free agency.

Recent reports are that MLS has budged on the salary cap, agreeing to increase the cap from $2.3 million to $2.6 million in the new agreement.  That concession will help address a primary union concern, that certain of the league’s players are badly underpaid, making as little as $12,000 a year.  While an additional $300,000 to spend on salaries will have a modest effect on the average player salary, the league can persuasively argue that, unlike certain other American sports, professional soccer is not yet profitable enough to warrant a higher wealth distribution to players.

The 24th Minute blog also reports that the league has compromised to some extent on the issue of guaranteed contracts for players.  MLS’s ability to cut underperforming players who are still under contract has helped to keep the league’s labor costs down, but has also led to dissatisfaction among players who naturally desire increased stability in their employment contracts.

These concessions, however, do not ultimately resolve the real dispute between MLS and the players union — players’ ability to move freely among MLS teams after their contracts have expired.  Under the present system, because every MLS player contracts with the league, rather than an individual team, out-of-contract players require the league’s consent (i.e. through a trade) to play for a different MLS club after their contracts are up.  This system prevents teams from bidding for “free agent” players and thus drives down salaries considerably.  It is unsurprising that implementing free agency in MLS sits at the top of the players’ list of demands in the collective bargaining process.

The free agency issue is so important, however, that MLS will not likely concede it in collective bargaining negotiations.  The main reason that MLS organized as a “single entity” at its inception was to be able to prevent free movement of players, allowing the league to keep salaries under control.  MLS’s single entity arrangement was challenged in court and was ultimately upheld by the First Circuit in the Fraser v. MLS decision. Having fought — and won — a major league battle that bears heavily on the free agency question, it is doubtful that MLS would concede that point at the bargaining table.

History has shown that free agency has generally come to American sports in only two ways, through lawsuits and/or through work stoppages.  The NFL had restrained player movement for years until the players went on strike in 1987, decertified the union, and filed a legal challenge led by New York Jets player Freeman McNeal, which challenged the NFL’s free agency rules as an unlawful restraint of trade.   The NFL players prevailed in the McNeal case after a jury trial, forcing the NFL to allow free agency.

The 1994 lock-out in the National Hockey League was similarly prompted in large part by a battle over unrestricted free agency.  The rule prior to the work stoppage had been that only players 31 years of age or older were completely free to move to another NHL team after the expiration of their contracts.  Younger players could be forced to remain with their original clubs if the club matched a competing offer for the player or made its own “qualifying offer,” usually at a 10% salary increase.  It was only after the debilitating lock-out period that owners agreed to lower the unrestricted free agency age to 27 years of age (or seven years’ NHL experience), and even then only in exchange for the players’ concession on a salary cap.

Even in Major League Baseball, which unlike the other major sports, has enjoyed an exemption from the Sherman Antitrust Act under the Supreme Court’s 1922 decision in Federal Baseball Club v. National League, free agency was barred by a standard “reserve clause” in all contracts, which retained teams’ rights in players after their contracts expired.  The reserve clause was challenged in court in 1969 by St. Louis outfielder Curt Flood and was ultimately abolished in arbitration in 1975.

Nothing suggests soccer’s experience with free agency will be any easier.  As other leagues matured, their players gained the leverage necessary to challenge restrictions on player movement through work stoppages or by prevailing in the courts.  MLS players will likely need to walk a similar path.

That said, now is not the time for such drastic measures.  Professional soccer in the United States is beginning to take hold in the nation’s consciousness and that momentum is growing more steadily today than it has at any time throughout MLS’s almost 15-year existence.  There is palpable excitement around the 2010 World Cup, an increasing interest in American internationals playing abroad, greater television access to the world’s top professional leagues, a real commitment from ESPN to market the game in the US, and an unprecedented level of investment in soccer-specific stadia across the country, from the Home Depot Center to the brand new Red Bull Arena.

While relatively few MLS teams have been profitable thus far (only Seattle, Toronto, Houston and the LA Galaxy qualify), this should change as early as the next collective bargaining cycle three years from now.  Players would be well advised to allow soccer as a whole to grow to a sustainable level before taking measures, however necessary, that would risk the sport’s long term prospects. Fighting the free agency battle prematurely will not result in unrestrained player movement as with the NFL, NHL, and MLB examples.  It is much more likely to squander a golden opportunity for growth of soccer in the United States, which will not help the players’ long term cause on free agency or any other labor issue.



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