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MLS CBA Part 2: The false promise of "free agency"

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The MLS player’s union should look at defined goals versus labels borrowed from other leagues.

Trevor Ruszkowski-USA TODAY Sports

This article is the second part in a series of articles examining the 2015 MLS CBA negotiations. In the first part, a brief history of the league was set out in order to better understand the sticking points in the current MLS CBA negotiations. This second part looks specifically at free agency.

In preparing this series, I interviewed MLS player agent/attorneys, non-MLS player agent attorneys, and read countless law review articles/court decisions.

FREE AGENCY IS THE APPARENT STICKING POINT

Free agency is "absolutely" worth an MLS player strike. Michael Bradley, TFC

MLS

Assumed MLS response, as a MLS spokesman was not available for comment.

THE MLS WILL OPPOSE FREE AGENCY AT ALL COSTS

In the first part of this series, the history of the MLS was examined. When the structure of the league was established, there were two core goals: to avoid the wage wars that destroyed previous U.S. professional soccer leagues and to gain immunity U.S. anti-trust labor laws. Free agency is almost certainly a fatal blow to these two core goals.

It is critical the MLS player’s union understands this: their demand for free agency directly threatens the two core goals that the league views as the keys to their survival to date. This is not a debate over a few hundred thousand dollars here and there. The league likely views this as a direct threat to continued survival.

Now that the current CBA is expired the league, and the players, are subject to the complete plethora of U.S. labor laws. While the player’s union can threaten to strike, MLS has a tool available that is as AT LEAST as powerful as the strike - the lock out. A large number of players in MLS live, barely, from paycheck to paycheck. MLS is much more capable of surviving a work stoppage than the players.

MLS has far more incentive, and ability, to oppose free agency than the players have to insist on free agency.

FREE AGENCY IS INCOMPATIBLE WITH, AND A DIRECT THREAT TO, THE LEAGUE’S GOALS

MLS was purposefully designed as a single entity in order to accomplish the two core goals of the league, cost control and immunity from anti-trust laws.

Free agency is not compatible with a single entity model. The idea behind free agency is that employees are able to market their services to the highest bidder. In the MLS, there is exactly one (1) bidder. The player works for the league, not the team, not the investor/operator. Even beyond this conceptual problem, free agency directly threatens the two core goals of the league.

Free agency leads to wage wars. A look at other U.S. leagues provides a clear case study - leagues faced wage increases of several hundred percent to several thousand percent in the years following free agency. This is not insignificant to MLS.

In speaking with player agents and others involved, there is a profound feeling that MLS is still a very fragile league. MLS is one or two bad decisions away from spending its way into oblivion a la NASL. MLS fans had the first glimpse of this potential over the last 18 months as a handful of clubs spent more on one designated player than the rest of the league spent on the entire roster. As will be discussed in the next part of this series, teams with wholly owned second division teams, and teams owned by foreign soccer clubs, are gaining increasing advantage on skirting MLS salary rules.

Free agency will lead to the loss of single entity anti-trust immunity. I’d like to say, up front, that I think the league’s actions since the Fraser decision have likely killed their single entity anti-trust immunity. Since this 2002 decision, the league has clearly been picking winners and losers in league operations, has established the designated player rule, has designated arbitrary rules for allocating European players to certain teams but not others. Any serious, objective examination of the real world league operations is going to establish that some teams are treated differently than others, and this "sham exception" analysis is going to defeat single entity immunity. The only way that free agency can be adopted is that if there are COMPETING employers in the market place for an employee’s services. The league obviously cannot agree to competing bids for employee services if the league wants to continue to argue that the league is the single employer.

THE PLAYERS WILL GAIN LITTLE FROM FREE AGENCY

When compared to what MLS stands to lose from free agency, the players have little to gain. This was the consensus among agents, both those who represent MLS players and those who represent non-MLS players in leagues that have already established free agency.

Free agency will apply only to the small number of players who actually qualify for free agent status, whatever that status may end up being. Further, within the confines of a salary budget that is controlled by a single employer, the league could respond to free agent solicitations with a simple "meh." MLS only has a certain number of Galaxy, RSL, Sounders, TFC, NYCFC, NYRB, OCSC teams that seem to be able to whisper sweet nothings into MLS ears and get what they want. Further, in the past year MLS has seen player "prejudice" on which towns a player is willing to go to.

A small number of players will be eligible for free agency, and they will be competing for an even smaller number of roster spots on the teams that are "in play." Small supply, smaller demand. Google economics 101 and reach your own conclusion.

Simply stated, MLS LLC is a Delaware limited liability corporation that is bound to operate pursuant to the terms of the operating agreement adopted and agreed to by the members, the investor/operators. The players’ union cannot change this operating agreement absent a voting agreement from the members of the LLC.

The comment was made, several different times, that the players’ union is dominated by older players who have hit a ceiling and comments from former players who hit that ceiling and may be less sanguine about their league experience. Younger players and home grown players are under-represented and being swayed by these veterans.

There is a danger, all too familiar to attorneys, that participants in negotiations become attached to labels rather than results. Free agency is a concept borrowed from professional sports leagues that are entirely unlike MLS. MLS players are served better by deciding upon defined goals versus stating that one borrowed label encompasses all of those goals. The goals of the players might be accomplished without thwarting the goals of the league, if labels could be set aside.

Define discrete goals and avoid the stigma of labels. That is the time honored advice from attorneys.

Part 3 of this series will focus on goals that will help the majority of the players, and goals that players and smaller market owner/operators might agree upon to start regaining some balance against the heavy-hitters of the league.