Inside the new MLS Collective Bargaining Agreement

Major League Soccer and the MLS Players Association’s newly-ratified Collective Bargaining Agreement means that the league will avoid a first-ever work stoppage. After the league invoked a force majeure clause in the prior CBA, the two sides came back to the negotiating table for the third time in 12 months, but were able to come to terms before the players were locked out.

On Monday, the league released detailed of the new CBA, which will last through the 2027 season. Below are key details from the league press release (emphasis added).


Player compensation

Year
 
Salary Budget
 
General Allocation Money
 
Discretionary TAMAvailable Spend
on Roster*
2021$4,900,000$1,525,000$2,800,000$9,225,000
2022$4,900,000$1,625,000$2,800,000$9,325,000
2023$5,210,000$1,900,000$2,720,000$9,830,000
2024$5,470,000$2,585,000$2,400,000$10,455,000
2025$5,950,000$2,930,000$2,225,000$11,105,000
2026$6,425,000$3,280,000$2,125,000$11,830,000
2027$7,068,000$3,921,000$2,025,000$13,013,000
*Clubs have the opportunity to exceed these figures with spending on up to three Designated Players and up to three players through the League’s under-22 player initiative.
  • As was the case in the CBA agreed to in June, players also will share in the increased revenue generated by MLS’ new media agreements beginning in in 2023. MLS will increase player spending by an amount equal to 12.5 percent of the incremental media revenue, as defined in the CBA, in 2023 and 2024, increasing to 25 percent for the 2025, 2026 and 2027 seasons.  The League’s current local, national and international media rights partnerships expire at the end of 2022.
  • Team bonuses and 401(k) contributions will remain as agreed to in the previous CBA.
  • The Maximum Salary Budget Charge, the maximum a club can be charged for an individual player on the team’s salary budget, increases from $612,500 in 2021 to $883,438 in 2027
Year Maximum Salary Budget Charge  
2021$612,500
2022$612,500 
2023$651,250 
2024$683,750 
2025$743,750 
2026$803,125 
2027$883,438 
  • Minimum salaries for players on the senior roster increase from $81,375 in 2021 to $125,875 in 2027.
  • Minimum salaries for players on reserve roster increase from $63,547 in 2021 to $97,700 in 2024.
  • Clubs will continue to have the ability to sign up to three Designated Players.

Free agency

  • Under the most recent CBA, to be eligible for free agency a player needed to be 24 years old and have five years of service in the league.  Beginning in 2026, the eligibility has been expanded to include players who are 24 years old with four years of service in the league.
  • For the 2026 and 2027 seasons only, the new CBA also has modifications to the increases in compensation that free agents can earn:
    • For players making the maximum salary budget charge or less, a free agent can sign a contract with another club with an initial salary of the greater of $25,000 above the maximum salary budget charge, or 20% above the player’s prior salary.
    • For players making between the maximum salary budget charge and the maximum targeted allocation money (TAM) amount, the player could earn 20% above the prior salary up to $500,000 above the maximum salary budget charge and 15% of such salary from $500,000 above the maximum salary up to the maximum TAM amount.

In reality, not much changed in the overall numbers. The real change was delaying growth for the next two years, pushing the agreement back through 2027, instead of expiring in 2025 as initially planned.

The league got what it wanted when it invoked force majeure: extending the CBA by two years. The United States, Canada and Mexico are hosting the FIFA World Cup in the summer of 2026. With demand for the sport expected to be at an all-time high in North America, the owners won’t have to re-negotiate with players until nearly 18 months after the fact. They’ll get to profit from the initial boom and won’t have to negotiate increased spending until after the initial spike in revenue.

The players avoided more immediate pay cuts (they took a 5% salary decrease in 2020 as part of the league’s return to play), as well as picking up some improved free agency terms and slight salary increases.

Overall, though, the league and owners got the best of this one. They had a clear advantage throughout the negotiations, and once again benefited from the wage disparity across the league. While many more established players are able to afford a work stoppage, the majority of players towards the bottom of the pay scale couldn’t survive a significant stoppage, regardless of how organized the union was.

Players will have to hope that the 2026 World Cup isn’t just a flash in the pan, but brings a long-term increase to demand for soccer in North America.

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