MLS raises salary cap to $11.6m in 5-year deal with its players

February 7 –  Major League Soccer and the MLS Players Association (MLSPA) have agreed a five-year collective bargaining agreement that will increase pay and improve conditions.

The agreement comes just a couple of weeks before the expanded 26-team MLS kicks off its 25th season and in time for the start of the Concacaf Champions League.

“This agreement addresses key strategic priorities for the league and our players while also retaining the basic player compensation structure that has been the foundation for the growth and stability of Major League Soccer,” said MLS Commissioner Don Garber.

At the top of the agreement is raising of the MLS salary cap from to $8.5 million to $11.6 million a year. The ‘designated player’ ruling that allows clubs to spend on players outside the salary cap remains in place.

For the players within the salary cap the minimum salary for senior players will rise from $70,250 last season to $109,200 by 2024. Players will also have an increase 401(k) contributions (pension provision).

According to the MLSPA the average earnings in 2018 were $411,926 per person, though the median wage was $179,000. A full third of the league’s players, 238, earned less than $100,000.

The league has linked the opportunity for players to earn more with its media deals for the first time. With current national media rights deals expiring in 2022, if the new agreements increase media revenue by $100 million or more, 25% of the increased revenue above $100 million will go to player salaries.

There is also a restriction for players around so-called ‘free agency’, allowing players over the age of 24 and who have been playing in the MLS for five seasons, to become free agents when their contracts expire. This is a relaxation of the rules from 28 year of age and eight years in the MLS. Theoretically it could stimulate the player transfer market.

And with the vast travel distances involved for players, teams will now have to use charter flights for at least eight legs of travel, as well as for play-off matches and CONCACAF Champions League games requiring international travel. That figure will rise to 16 by 2024.

Higher performing and better prepared players should lead to a better MLS product, improved US performance in the Concacaf Champions League and ultimately higher media revenues. Which in turn means more money for player wages.

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