Major League Soccer could be heading toward a work stoppage. Ahead of the 2021 season, labor strife is looming over MLS again after the league invoked the force majeure clause that was added to the collective bargaining agreement that was agreed upon in June.
Let us explain.
A recent history of labor strife
MLS and the MLS Players’ Association faced a work stoppage in 2015, with the agreement coming days before the season. The negotiations were contentious and both sides dug into their positions before coming up with an agreement, which ran through the 2019 season that raised player pay incrementally and created free agency within MLS for the first time in the league’s history.
After the acrimonious negotiations of 2015, the negations prior to the 2020 season were surprisingly smooth. The league and players reached a deal in late January 2020, just about a month before the season’s scheduled start. Players received more substantial raises and free agency extended to a broader class of players. The players also negotiated revenue sharing for the first time ever, gaining a split of upcoming television money.
The agreement, which ran through the 2024 season, did not include a force majeure clause that would allow for renegotiations in the event of extraordinary circumstances, such as a global pandemic.
The relatively smooth process appeared to soothe labor tensions that were previously bitter, however, the deal was not ratified before the pandemic hit. This left the agreement open to re-negotiations. The league and players moved to change the deal in the late spring of 2020 as the pandemic halted play and left the league losing money.
Through May and June 2020, MLS and its players negotiated a return to play, starting with the MLS is Back Tournament in Orlando, pay and bonus cuts for several classes of players, adding a year to the agreement — taking it through the 2025 season — and adding the force majeure clause to allow for re-opening the deal in the event of extraordinary circumstance.
The league’s opening moves
MLS signaled that the financial strife of the ongoing pandemic will continue through 2021. League commissioner Don Garber said that the league’s revenues were down nearly $1 billion in 2020 and the coming season looked similarly bleak during his state of the league address before the MLS Cup Final in December. At that time, he noted that the owners might invoke the force majeure clause that opens up the collective bargaining agreement for renegotiation so that the league could seek financial relief.
The league then used the clause on Dec. 29, informing the MLSPA that it wished to modify the agreed upon CBA. This opened a 30-day negotiation period between MLS and the players, citing the ongoing nature of the pandemic in reducing in-person attendance in sporting events and the expected loss of revenue.
A week later, the league sent their proposal to the MLSPA. MLS would not propose any pay cuts to the player pool, citing a willingness to carry short term losses. Its main proposal was to extend the June 2020 CBA for two years, through the 2027 season. This would push the terms of the CBA back a year, stalling revenue sharing and pay increases, while extending the agreement past the upcoming World Cup that is scheduled to be hosted by Canada, Mexico and the United States.
The proposal would take labor strife before the World Cup off the table. The event is expected to provide a boost to domestic soccer in a way that the 1994 World Cup helped launch MLS.
A public battle
The MLSPA gave a measured response initially. The group did not respond formally to the league’s Jan. 5 offer until Jan. 22. The organization, a large collaborative group of players across the league, reportedly met behind the scenes to size up the league’s offer and plan a response.
Much of the MLSPA initial response was through executive director Bob Foose. He disputed the league and commissioner Don Garber’s public call’s for urgency on Jan. 13 in a conference call with the press. Garber released a letter to fans on Jan. 21, defining the league’s position in its negotiations with the players, and trying to put more urgency on the players.
While not a direct effort to pressure the players, MLS unveiled the key dates on the 2021 schedule on Jan. 25. The league scheduled training camps to open on Feb. 22 with the first slate of games scheduled for April 3 and 4. The de facto effect compresses the negotiating window.
The league also distributed a memo internally on Jan. 27th, that asked teams to prepare for a lockout and provided guidance on prohibited activities if the league locks out players. The memo quickly found its way to the media. Effectively raising tensions in the negotiations.
Counter-offers and counter-counter-offers
The player’s formal response on Jan. 22, rejecting the extension of the CBA, leaving the terms through the end of the 2024 season, but proposed pay cuts and limiting free agency for players in the coming season. The players tallied their concessions at just over $50 million over the life of the deal.
The players rejected the extension of the CBA through the World Cup because it would strip the MLSPA of one of the biggest bargaining chips: the possibility of a strike leading up to the biggest event in American soccer history. The league would have the most to lose with a strike at that point.
MLS’s counter-proposal was for small raises and minor modifications to free agency during the latter stages of the CBA, keeping the extension terms through the 2027 season.
The players' counter-offer this past week was the first significant move in the negotiations. They proposed extending the CBA a year, through the 2026 season, past the World Cup. The concession extended the terms of CBA for seven seasons but allowed the players to retain leverage in the expected post-World Cup afterglow.
On Friday, the league rejected the offer and further escalated tensions, holding to the extension through the 2027 season and now setting a lockout date. MLS and the players extended the negotiation window a week and will meet throughout the next seven days. However, the league released a statement that it will close negotiations with the MLSPA on Thursday evening, Feb. 4 at 11:59 p.m. At that time, they will terminate the existing CBA and lock out the players.
It’s increasingly clear that the league and owners are pressing their current position of strength for long-term advantage. The pandemic has cost the league significant revenue and they responded with layoffs as the year progressed. They also have said they can weather the current shortfalls, but need long-term concessions.
The prime goal appears to be taking labor strife around the 2026 World Cup off the table. By extending the CBA through the 2027 season, the league would not be faced with a possible strike in the years around an event that is expected to raise the profile of American soccer and MLS to new heights.
The players’ rhetoric signals increasing frustration with the league’s brinksmanship. The June 2020 renegotiations took into account the losses from the past season and it’s unclear how far-reaching the effects of the pandemic will be in 2021 given the arrival of vaccines and other treatments that may blunt the impact of the ongoing health crisis. The league will suffer losses, but have already said it can financially bear it.
The increasingly clear goal of long-term negotiating leverage has made these negotiations very contentious, as the players would be giving up their best chance for major gains in future years. The league feels it can deal with the short-term impact of a labor deal when fans aren’t allowed in stadiums in great numbers and may not miss the games as much as in 2026, when a possible work stoppage would have a greater impact. On the other side of the table, the players clearly know what is at stake — the future of the MLSPA’s labor gains — and there won’t be a chance like this again.
With the stakes the highest they have been between MLS and the MLSPA, neither will be eager to present further concessions. The league’s attempt at brinksmanship looks destined for open conflict. The coming days will tell a lot on what fans should expect in terms of the start of the 2021 season and beyond.