Categories
contracts legal Major League Soccer (MLS) MLS

MLS players threatened with a lockout after latest offer from MLSPA

MLS News

MIAMI, Fla. — (1 June 2020) Just when you thought everything was ready for Major League Soccer games to resume in the form of a summer tournament; just when you were waiting for the calendar to be released in order to know at what hours of the morning or evening there would be games, the plans encountered some clear air turbulence.

Fasten your seatbelts.

Yesterday, the Major League Soccer Players Association (“MLSPA”) announced that it had voted to approve the union’s latest counteroffer to MLS as it relates to massive economic concessions for the 2020 season, modifications to the recently agreed upon collective bargaining agreement (“CBA”), and their agreement to participate in a summer tournament in Orlando. The MLSPA’s proposal was delivered to the owners.

Now about that unexpected turbulence.

According to multiple sources, MLS pushed back with the conterproposal agreed to by the players association with a hardball reply, insisting that it had submitted its best offer and that there will be no more negotiating wth the union. The league threatened the players: If they did not accept the owners’ proposal, they will lock the players out. A lock out would suspend the players’ wages as well as their health insurance.

Former player and now television analyst Herculez Gomez tweeted that MLS was giving the players until noon on Tuesday. By this evening, Gomez reports that the league has pushed that deadline back to 12 noon on Wednesday. The implication is that despite their threats, it’s not only the players who stand to lose in a lockout.

The threat comes after the MLSPA agreed to the league’s demand that a force majeure clause be inserted into the new CBA. A force majeure clause is a contratual provision that allows one or both parties to void a contract if circumstances arise that are beyond the parties’ control and which make the performance of the contract impossible, or, in some cases impractical, for one or both parties. (For example, a worldwide pandemic could reasonably be considered to be unforeseeable, or, to use another example, an invasion of Earth by extraterrestrials.) The force maneuvers clause in this case was modelled after one in use in the NBA.

The particular terms of the force majeure clause in this case presents a particular stumbling block. MLS’s proposal gives it the right to invoke the clause (and be excused from performance of the CBA) if five teams suffer an attendance drop of 25 percent or more from the previous year, while the MLSPA’s doesn’t have that stipulation.

In a statement, the MLSPA said their proposal includes salary reductions across the entire player pool, reduced team and individual bonuses, and additional concessions to existing and future terms of the CBA. The MLSPA is also requesting that the current CBA -whose terms were agreed to last February but which has not yet been ratified by either side — be extended by one year to 2025.

Image
Statement released by the MLSPA on June 1, 2020

The inclusion of a one-year CBA extension would push the total amount of concessions the MLSPA is making well beyond the $100 million contained in the union’s previous proposal last Friday.

The two sides are also close but without agreement on the matter of pay cuts. While the MLSPA has offered to accept a 7.5 percent pay cut, MLS’s most recent offer came in at 8.75 percent.

Given how much the MLSPA membership has already conceded, the threat to lock out players was surely shortsighted at best. As a couple of knowledgeable writers have commented:

This tactic might be effective, but it’s not the right thing to do. Threatening to lock players out and take away their pay and health benefits in the middle of a pandemic is incredibly tone deaf, perhaps even cruel.”

Sam Stejskal and Paul Tenorio

A bigger hurdle is the start of a proposed revenue sharing plan related to a new broadcast rights deal that will commence in 2023. The CBA terms agreed upon in February stated that 25 percent of the net increase in media revenue that exceeds $100 million above 2022 levels (the final season before the new deal) will flow into the MLS salary budget and General Allocation Money on a per team basis. Despite having agreed to those terms as part of the new CBA, more recently, MLS has been trying to delay its implementation until 2024. The league has since modified its demand, requesting the union accept a revenue sharing of 10 percent of the net increase in 2023 and 25 percent the following year. The union countered with 17 percent in 2023 and 25 percent in 2024.

The MLSPA’s vote on Sunday to approve its proposal to owners came after another vote late last week, in which the players approved a package containing similar concessions totaled around $100 million. Sources say that offer included a $5 million cap on bonuses.

Orlando Tournament

The particulars of the tournament are set, namely that the 26 teams will travel to Orlando on or around June 24, with around two weeks of training sessions followed by a three-game group stage sometime in July. After the group stage there will be a knockout round to dertermine a winner. What the winner gains is not disclosed. The revised total time away from home for players and team staff should amount to six weeks, down from the original plans for eight to ten weeks.

Health and safety protocols have largely agreed to, with the new wrinkle that some players could opt out for medical or familial reasons such as a partner who is pregnant. A couple of notable star players, the Los Angeles Galaxy’s Javier “Chicharito” Hernandez and LAFC’s Carlos Vela have partners who are pregnant and could thus be allowed to skip the tournament.

MLS has been shut down since March 12 due to the COVID-19 pandemic, and has been engaged in negotiations with the MLSPA over the past several weeks as to how to return to action in order to soften the pandemic’s economic impact.

By Ken Russo

My work in the business of soccer applies skills acquired in law practice with a focus on the sport's commercial, communications and sporting components. Russo Soccer aims to inform, educate and engage in dialogue on news and relevant issues in the game.

Um advogado por formação, concentro meu trabalho nos negócios, comunicações e operações de equipes no futebol mundial. | Abogado con fundación avanzada en comunicaciones, enfocado en los negocios del fútbol y las comunicaciones. | Je suis un avocat experimenté dans les affaires de football.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s