MLS players want free agency; MLS owners don’t. Faced with a standoff, history says the league won’t blink first
Less than a year after the first ball was kicked in Major League Soccer’s 1996 inaugural season, eight MLS players filed a class-action lawsuit in the U.S. District Court in Boston, claiming that the league, its investors, and the U.S. Soccer Federation were illegally conspiring to restrict player movement and keep salaries low. The players took aim at the very heart of the league’s single-entity structure, alleging that “the transaction which brought MLS into existence” violated federal antitrust laws. Shortly after news of the lawsuit broke, then-MLS Commissioner Doug Logan bumped into David Stern, his NBA counterpart. Stern congratulated him. “You’ve finally arrived,” he said, according to the Dallas Morning News.
Unlike any of the leagues, in the U.S. or abroad, that it hopes one day to compete with, Major League Soccer, L.L.C., is not a joint venture between independent owners but a single corporation, its clubs not franchises but wholly-owned subsidiaries run by “investor-operators.” To most MLS fans, the words “single-entity” call to mind things like the Allocation Order, the byzantine process through which incoming players from overseas are assigned a club, and the various points at which the league has simply decided to throw its own rules out the window and even flip a coin to decide where a player lands.
For MLS owners, however, single-entity grants the league immunity from an antitrust suit like the one players brought in Fraser v. Major League Soccer. A pro sports league, by its very nature, creates a monopsony—a market in which many sellers (the players) must offer their services to a single buyer (the league)—and therefore risks running afoul of laws designed to prevent anti-competitive business practices. Major League Baseball, with its long history and political clout, was famously held to be exempt from antitrust laws in a 1922 Supreme Court decision. In other American sports, the collective bargaining process is not subject to such laws, but players always have the option to dissolve their union and file an antitrust suit against the league, as NFL players did in 2011.
None of this, however, applies to MLS, as long as its single-entity defense—what sports law expert Gabe Feldman calls the “holy grail” of antitrust immunity—holds water. Legally speaking, a corporation can’t conspire or collude with itself, and the players’ claim in Fraser v. MLS that the league is merely a “sham” corporation didn’t pass muster in court. After their six-year journey through the federal court system ended in defeat in 2002, the players accepted the league as a single-entity and voted to form a union.
Since unionizing, MLS players have extracted real concessions from the league in collective bargaining agreements signed in 2005 and 2010, including guaranteed pension and health benefits and increases in minimum salary requirements, which helped to raise the median salary from $42,796 to $91,913 over the last ten seasons. But more than a decade of relative labor peace appears to be coming to an end. With a little more than two weeks to go before the scheduled start of the 2015 regular season, the league and the players’ union have reportedly made little progress on a new collective bargaining agreement since the previous deal expired at the end of January.
At issue, beyond routine matters of compensation, is the league’s lack of free agency—something that separates it from virtually every other big-time professional league in this or any other country. Even Major League Baseball, which clung to its reserve clause for almost a century and still places heavy restrictions on player movement, now allows limited free agency. In MLS, out-of-contract veterans—no matter how experienced or valuable—must first pass through the oddity known as the Re-Entry Draft, a compromise measure hashed out five days before the 2010 season during the last round of CBA negotiations.
This time around, however, MLS players say they’re prepared to strike for free agency with vocal support from stars like Michael Bradley and Robbie Keane. “It’s impossible to get a deal done” without movement from the league on free agency, players union executive director Bob Foose told the Orlando Sentinel last month. “This is what we want,” warned D.C. United’s Bobby Boswell last week, “and there won’t be a season without it.”
The league contends that free agency could lead to out-of-control salary costs and hinder its ability to compete on the global transfer market, but its real concerns likely have to do with the battle that began in a Boston courtroom nearly twenty years ago. Since the Fraser ruling, it’s grown increasingly difficult to view the league as a single, unified organism, and not what it really is: a league like any other, composed of various constituent parts with diverse and at times conflicting interests. Over the past decade, the number of MLS franchises has close to doubled and continues to grow. Most clubs play in slick new soccer-specific stadiums, command millions in kit sponsorships and other commercial deals, and compete to sign high-priced talent from overseas through the Designated Player system. And in addition to run-of-the-mill American billionaires like Robert Kraft and Stan Kroenke, its “investor-operators” now include an Austrian energy drink company, a Brazilian venture capitalist, an Italian-Canadian dairy magnate, and the Abu Dhabi Royal Family.
Throw in free agency, with clubs bidding against one another for talent on the open market, and it becomes nearly impossible to consider MLS a single-entity. In the event of future antitrust litigation, the league’s single-entity defense might fall apart, and MLS players would gain the additional leverage of the so-called “nuclear option” to decertify their union and sue the league in court. Even other leagues, like the ambitious NASL, might sense an opportunity to follow in the footsteps of baseball’s Federal League and challenge MLS’ division-one status with an antitrust lawsuit.
All of this—rather than salary costs or international recruitment—is almost certainly what is on the league’s mind as it continues to oppose any and all forms of free agency, no matter how limited. Rightly or wrongly, Garber and other league executives see unrestricted player movement as a Pandora’s box they don’t want to open, a possible existential threat to the league’s foundation. In an interview with the Orlando Sentinel two weeks ago, Garber mostly deflected a question about single-entity, but acknowledged that a lack of free agency is “a key aspect of our entire system.”
With the clock counting down to the season opener on March 6th, a quick resolution doesn’t seem likely, but as the prospect of lost wages and revenues turns into reality, there’s hope that a compromise might eventually be reached. Players, in particular, are unlikely to have the stomach for a protracted work stoppage, while the league won’t want to lose its considerable momentum coming into its 20th season.
However the CBA negotiations play out, at some point in the future—whether in the next few weeks or a few years down the road—the league will have to ask itself whether it’s willing to do for the vast majority of its players what it has already done for a handful of millionaires and billionaires. The answer may very well determine the fate of the 2015 season and the future of the game in the United States.