The agents’ survey

Mirror, mirror on the wall — what are the biggest issues MLS faces of all? An upcoming CBA negotiation and uncertainty over the kickoff of the 2015 season. An increase in NASL spending that’s putting pressure on MLS to offer improved entry-level contracts. The fact that there are still wide gulfs between how MLS does deals and how the rest of the world does deals. We asked agents across North America for their input — and we got some very, very interesting answers. Here’s a rare peek behind the scenes…

During the 2014 MLS SuperDraft, Major League Soccer Commissioner Don Garber told reporters that the league is still losing US$75 million to $100 million a year.

In February, the league paid what it claimed was “market value” to take over operation of the struggling Chivas USA franchise, with the hope that it will be soon sold to new investors and then rebranded.

These two developments take on added levels of intrigue when fans consider that, before the 2015 season begins, that the league and the MLS Players’ Union will have to hammer out a new Collective Bargaining Agreement.

Addressing the media and fans in an online event held just before the start of the MLS season, Garber said the league and the union have yet to discuss the CBA. But he said the players and league are “partners in growing the game together.” And he stressed that he expected there to be many obstacles to overcome before a new deal is reached.

“This will be a challenging process, no different than what it was five years ago.”

It’s become a common tactic for sports leagues to cry poor before they need to start talking to their unions. But, there have been developments which will embolden MLS players.

Exhibit No. 1: Yes, there are still players making less than US$40,000 a year, and the league still commonly signs players to deals filled with team options — even though the Court of Arbitration for Sport regularly frowns on unilateral extensions. But, the fact that Toronto FC was able to allocate more than $100 million to off-season deals will help the union argue that the financial distress of the league is exaggerated.

Exhibit No. 2: A new, more lucrative U.S.-based television deal is expected to begin in 2015.

Exhibit No. 3: And, 2015 is scheduled to see the relaunch of the post-Chivas Los Angeles Franchise, the entry of Orlando City FC into MLS and, most importantly, the arrival New York City FC. Would MLS risk losing games in a season that has so much on the line?

It’s not easy to get a pulse on the CBA at this stage; after all, players want to focus on the 2014 season. They want to worry about their performances on the field. And the league isn’t going to scare off fans and potential sponsors with talk of labour issues. FIFpro, the global organization that looks after the rights of players, did not return requests for comment.

But, Plastic Pitch decided to ask those who do have a great feel on the state of the league — and the union. And those people are agents.

We sent a survey to agents across North America, asking what they thought about upcoming labour talks — and their takes on the state of MLS.

Understanding that agents have to deal with MLS — and that their clients are union members — those who did answer were guaranteed anonymity. And, in return, they were especially candid about the issues facing MLS and its players — from the coming CBA negotiations to the difficulties that they experience in the North American players’ market.

Not a single agent who answered predicted a smooth and easy negotiation. There are some differences of opinion on which side has more leverage; there is a feeling that the players know the league has a lot to lose — especially with NYCFC’s presence in the league next season and the potential global embarrassment of having part of that team’s debut season scrubbed by a labour action. But some also felt the union dropped the ball in the 2010 deal, that signing off on a five-year pact that ends in a non-World Cup year was a big mistake that the players could pay for in the next negotiation.

Lockout? Strike? Deal?

“I know there was a lot of fear the last time around that the MLS might lose a few games, but luckily they brought it together in good time,” a U.S.-based agent replied. “I think with how the league has grown in these past few years, the players have a bit more power in any threatened work stoppage, as any missed games would significantly hurt the league in a critical growth stage. I foresee the players asking for a lot of concessions, especially concerning  their earning power and input on which cities they’re playing in. I am not sure how much the owners or league will want to concede on those points. Though, with the added star power to the league, it’s becoming a more desirable and serious destination for players abroad, that does work in the owners’ favour, I think.”

A Canadian agent told us that players have to wonder if the union has been the best defender of their rights. He believes that solid representation from strong agents will do players better than a large union, which is filled with players at different salary levels who don’t necessarily have mutual interests. Some players making the minimum may want to see rookie salaries increased, while veterans and Designated Players may put total free-agency rights at the tops of their lists.

And, MLS has a major advantage over some other leagues. While the league may have central control over contracts, at least the players know the paycheques are reliable. They don’t bounce, which isn’t always the case in smaller European leagues.

“It is what it is,” the agent said. “I really don’t like any kind of unions, however, when it always comes to defending the player and his rights, I am a strong supporter. As you know, places  around the world, still some clubs can’t pay players, they abuse players by not providing accommodations, food, lodging… and sometimes even their paycheques are late.”

And another American agent said that negotiating before NYCFC and Orlando City come into the league doesn’t give the players as much leverage as they would have had if they’d entered into CBA talks in a World Cup year.

He said the biggest mistake the union made in the last deal was rubber-stamping a five-year pact. He said the union should have stuck on a four-year term, which would have seen the CBA expiring ahead of the 2014 season. Losing games ahead of a World Cup would have put MLS under pressure from various national-team coaches, fretting that their players were inactive ahead of the biggest sports tournament on the planet.

“Of course I am concerned (about 2015), and I am particularly concerned that the players won’t get their proper rights that they are entitled to,” he said. “But imagine the leverage the players would have if they could be losing MLS games ahead of the World Cup. Imagine the pressure on the league if a player like Michael Bradley or Graham Zusi is sitting out as the U.S. is getting ready for the World Cup.”

So, in that agent’s mind, the union should target a three-year contract, so it will expire ahead of there 2018 MLS season, and the World Cup in Russia.

And, do the players and agents believe Garber when he cries poor? No. One agent summed up the view: “It’s a technicality. I don’t have the exact numbers, but, sure, you can say MLS is losing $75 million. But their parent company, SUM, is very profitable. I am thinking that it makes maybe $200 million. So the claim that MLS is losing money isn’t exactly true. It is a profitable league.”

Camilo: Hero or Villain?

This past off-season, MLS leading scorer Camilo da Silva Sanvezzo, who was signed to what players and agents call a 2+2 — a two-year contract with a two-year team/ league option — decided to force the Vancouver Whitecaps into a corner. He and his agent announced that the team option wasn’t enforceable, and that the player was, for all intents and purposes, a free agent.

Camilo then went off to Mexico to sign with Queretaro FC. After some haggling, Queretaro agreed to pay MLS a transfer fee believed to be about US$2 million, and Camilo was let go.

Taking the money was a better deal than taking Camilo to court.

So, is Camilo a villain for not honouring a team option, or is he a hero for fighting a one-sided contract?

As one agent told us, Camilo’s decision to fight the team option is already having a quiet effect through MLS. Remember that the league does not release contract terms, unlike other major North American leagues.

“After the Camilo situation, where he took on the league’s unilateral options that don’t offer much money, we are seeing some changes in contracts. I’ve now seen a one-year contract with no options. A two-year with no options.”

We were also told that Camilo was in a unique position; he had an agent who didn’t have many ties to MLS. The reason that many agents find it hard to rock the boat is because they have multiple clients who play in MLS. And with the league having central control of contracts, there is fear that if an agent makes a stand on behalf of one player, it might affect the contract negotiations for his or her other clients. But, with an agent who had no real MLS ties, Camilo had more freedom to fight his fight.

MLS vs. Europe

So, your client is coveted by MLS and European teams. Which way do you go? What works against MLS?

Agents told us a lot of factors still make more Europe more attractive.

“One of the biggest issues i’ve encountered with bringing players into the league has to do with the contracts. Specifically gross pay versus net earnings. In just about any league I’ve worked with — Europe, South America, Africa, Asia — the player’s contract states how much he gets paid net, after taxes. With the MLS salaries being gross, it’s a bit less attractive to be paid 30 to 35 per cent less. And, on that note, the fact that clubs cannot provide housing and cars is also a deterrent. A player making $200,000 a year in MLS would be one of the higher-paid players on the team. About $20,000 per month, minus 35 per cent tax, leaves $13,000 minus $1000 a month rent. That’s $12,000 a month, or about 9,000 Euros. Quite a few countries can afford quality players  for 10,000 euros a month. Not to mention professional athletes are a fickle bunch, the fact they have to go out and find their own place to live when its always been taken care of by the club and they have to pay for it, looks unprofessional.”

Another agent: “One thing I’d like to see is MLS teams take on the cost of housing. In Europe, that’s common practice, that a place to live is provided by the team. It can costs a player thousands of dollars a year to pay for housing.”

Lack of Transparency

MLS doesn’t release contract information. The union does make salaries in public, but any special considerations or terms in contracts aren’t revealed. And, MLS teams all have allocation money, unreported budget that they can apply towards salaries. They don’t tell the public about allocation, and they don’t tell agents, either.

An agent described the process: “What I’d like to see addresses is the lack of transparency when it comes to what teams have left in their budgets. The thing in dealing with MLS and MLS teams is that every negotiation is different. Sometimes, you deal strictly with the league and the team has no input at all. Other times, you are dealing with the team and the league is not saying much. But the one thing is that there are always two parties you are dealing with, not one. In a negotiation, you can have a team tell you that ‘no, the league has told us we can’t sign this player for that much’ and, in other cases, the league will tell us ‘but that team doesn’t have the cap room.’”

So, there’s always a fall guy in a three-party negotiation. A team can blame the league. The league can blame the team.

MLS also, rather quietly, made a slight rule change in late 2012, which would eventually make money available for Sporting Kansas City to re-sign star midfieler Graham Zusi in 2013.

The “Core Player” initiative allows teams to give players on their rosters significant raises without worries about the salary cap. But MLS didn’t publicly reveal the rule till August of 2013, and then announced that Zusi was one of 14 players who had been re-signed under the initiative.

Zusi is a star player, one of the American poster boys MLS desperately needs as Landon Donovan moves closer and closer to retirement.

But what of the player who makes the league minimum, and is in a two-year contract with an added two team option years, meaning he won’t really have any bargaining power?

One of the agents suggested MLS also needs a pool that would top up players making low salaries but end up making impacts in the league. He said that he had no opposition to a salary-cap league like MLS not opening the chequebook for unproven players; but he added that once those prospects do prove themselves, MLS needs to find a way to bump up their salaries as soon as possible.

For young players looking at MLS, the idea of signing a 2+2 at less than US$40,000 a year might be more attractive if they knew the salary numbers would be improved if they put up onfield numbers in MLS.

The NASL: Putting pressure on MLS

One thing was unanimous among the agents who responded to our survey: The NASL has given them some needed leverage.

“Now that NASL is getting more and more competitive and, in some cases, spending more money on salaries than MLS, it is something MLS will have to think about going forward,” an American agent told us.

He also said that Andre Lewis was awfully shrewd to sign a deal with the NASL’s New York Cosmos ahead of the SuperDraft. He was taken in the first round by the Whitecaps, but his rights were held by the Cosmos. Basically, Lewis put himself in a position where an MLS team would have to honour a contract that was given to him by an outside body. And that could be a contract without team options or worth more than a cookie-cutter MLS entry-level deal.

The same agent said signing a deal with an NASL team as a hedge going into the SuperDraft should be a path that any non-Generation Adidas player should explore. After all, it’s a business, and players now have the NASL avenue to increase their market values in a labour market that had once been controlled by MLS and its single-entity structure.

A Canadian agent said: “The NASL seems to be more free and less demanding on controlling their players. This league is headed in the right direction, with each club given the opportunity to generate their own transfer fees and capitalize on their earnings.”

The Border

One agent, a Canadian, spoke about his frustration in dealing with a league that views Canadians as domestics for Toronto FC, the Whitecaps and the Impact, but as imports for the 16 U.S.-based teams. As the Canadian Soccer Association tries to push MLS to approve a league-wide recognition of Canadian players as domestics, it has support from at least some of the agent family.

“The way I look at all three soccer leagues (MLS, NASL and USL) here in Canada and the United States, we are a united North America already. Just a flag, colour of money and our national anthems separate us. Other then that, in all the Big Four sports and more, we always compete together amongst each other. The U.S. and Canadian players should be unlimited on both sides of the border.”

Canadian domestics. Better reporting of salaries and salary-cap room each team has left. A stronger NASL to compete with MLS for talent. Fewer option years on contracts, or the total elimination of options. After-tax contract numbers. And, hopefully, a new era of labour peace.

Looking at a growing league where a millionaire like Michael Bradley could be on the field with a player earning less than US$40,000 a year, before tax, there are a lot of reasons to believe that the next year will be an interesting one for Mr. Garber and players’ union Executive Director Bob Foose.