MLS Players Pin Hopes on Unlikely Free Agency Concession

Weeks of disciplined silence on both sides of the MLS labor dispute dissolved this weekend. Several high-profile players and league president Mark Abbott (right) each blew off a bit of steam regarding negotiations that aren't going as well as we'd been hoping. The deadline for a deal is Thursday, and right now it appears that Thierry Henry and the Irish national team are more likely to come to an understanding than MLS and the players' union.

Parties in a labor impasse routinely accuse each other of failing to negotiate in good faith or failing to "address the real issues." It's standard rhetoric. On Saturday, Kansas City veteran Jimmy Conrad told ESPN that the players "feel like we've made a huge effort to be reasonable, to propose things that are within the confines of the single-entity structure ... At this point, they're not even humoring us with something tangible. If things stay where they are, then it's inevitable that a work stoppage is going to happen."

"The major issues need to be addressed in some fashion," he continued. "To simply cast them off as no big deal and think we're going to accept what they're going to propose is preposterous."

According to ESPN's report, either side could initiate some sort of work stoppage once the Thursday deadline passes, although talks can continue (and Abbott did say MLS doesn't intend to initiate a lockout). The question is whether they will, because it's become pretty clear that the league isn't going to budge on that which the players covet most -- free agency within MLS.

The players get that the MLS is still young, that it's the only American sports league facing competition from clubs abroad and that it requires both a salary cap and some kind of assured compensation if a player leaves the U.S. The key issue is that MLS clubs continue to hold the right of first refusal on a player even after they've chosen not to retain or re-sign the individual. The players have been somewhat successful in making that right of first refusal seem similar to the situation that prompted the Bosman ruling in 1995, when the European Court of Justice ruled that clubs no longer could restrict a player's movement or demand compensation once his contract had expired.

At first glance, MLS players have a point. A salary cap prevents overspending, meaning that there will never be some grotesque competitive distortion like the one we see in Major League Baseball -- where the New York Yankees and Kansas City Royals compete for the same trophy -- or in many leagues across Europe. Considering the single-entity mechanism already in place, it makes sense that MLS should at least allow teams to bid for a player's services under the cap, and that no athlete should be tied to a team that doesn't want him. Denying the players what we're told is a basic right in leagues around the world comes off as mean-spirited and selfish.

Free agency has become the central issue in these negotiations. That's unfortunate, because the union is fighting a losing battle.
"You have a guy who gets terminated, who more or less gets fired, and his former employer holds his rights, so his next employer has to give compensation. It just doesn't make sense to us," Los Angeles' Todd Dunivant said.

He's right, it doesn't. And when Abbott told media on Saturday only that free agency "is something the league is not prepared to do," and offered as a reason that "our system was designed to counteract the international market," it sounded like he was avoiding the issue and refusing to engage. Just like Conrad claimed. We're not talking about the international market, right? We're talking about free agency only within the confines of MLS and its salary cap structure. Why can't that work? Why not make that concession, reward the players for their commitment and patience and come off in the public as understanding and magnanimous?

FanHouse now understands that MLS does have its reasons for refusing to grant intra-league free agency, and that the notion of holding a player's "rights" isn't as cut and dried as Conrad, Dunivant and the union are trying to present. Certainly there are other issues in play -- guaranteed contracts, raising the salary budget and quality of life concerns such as per diems and housing, etc. -- but free agency has become the central issue in these negotiations. That's unfortunate, because the union is fighting a losing battle.

This is the way it really works behind the scenes:

Players and agents negotiate contracts with the MLS office, in conjunction with a given club that indicates how much of its salary budget it's willing to commit to that player. It's important to understand that the salary cap is not ironclad -- teams operate under financial guidelines established by the league and have some flexibility if it's going to take an extra $30,000 or so to bring a player onboard. The league makes that determination, and there aren't many instances where the league and player are too far apart. Last year, the "cap" was $2,315,000 per team. But that can be stretched if need be, and that's not including the allocation money that each club can access.

Let's say a club decides it no longer wants a player, either when his contract expires or because the team chooses not to exercise its option at the current salary. The player obviously can choose to return to the team at at a reduced salary, but more than likely the player and his agent are going to see what other opportunities might be available around the league.

If another club is interested and is willing to pay market value, MLS will make that deal. The league assumes that the new team is willing to pay some consideration, in the form of a trade with the original club, for the right to that exclusivity. If the suitor doesn't want to deal, it then risks losing that player on the waiver wire. The old club isn't going to keep the player on the books if he's not part of its plans, and it has no right to any compensation it doesn't make a meaningful effort to negotiate a new contract.

Either way, the rest of MLS will have a shot at that player if they want, and the league will sign him if there's demand. MLS won't keep a player out of the league if there's interest. If MLS can't get a current or new team to commit to a player, then it has no real reason to make an effort to sign him. It's usually pretty well understood by both sides where a player's real market value lies.

So in its own centrally-controlled way, MLS does allow for movement among its teams. It just requires that the movement be dictated by how much demand really exists for a given player. It refuses to allow salaries to become artificially inflated by clubs bidding for players without having to either give something up in trade or go through the league office. And the reason why it refuses may be difficult for the union to swallow, but it makes sense.

The harsh truth is that many of the players affected by the above scenario, including Kansas City goalkeeper Kevin Hartman and Dallas midfielder Dave van den Bergh most recently, just aren't that important to the league. Good players, yes. But players who drive ticket sales, TV ratings and interest in a sport still trying to establish itself in the American consciousness? Not so much. MLS understands it can't have a league without those players and will sign them if there's demand, but it can just as easily replace them with younger talent at reduced cost without too much backlash from the fanbase.
MLS has no incentive to make the Hartmans ($165,000 in 2009) and van den Berghs ($227,000) richer. It does have an incentive to leave as much space under its salary budget as it can to acquire notable players from overseas and to retain top young American talent -- the kind of athletes that will generate interest in a league in which the vast majority of teams are still losing money. League officials already think many players are overpaid based upon what they'd be able to command from a club overseas, if anything.

If MLS were to allow the kind of open market the players demand, it would create a situation where different arms of the same company would be competing with each other to spend a greater proportion of a fixed sum of money, thereby paying more for what the league already has than giving MLS the opportunity to invest in new assets. The league has to pick its spots carefully when and how it's going to compete in the global market for players, and it has to ensure that it has the resources to do so. It made an effort to re-sign Stuart Holden, for example. It was successful in keeping Landon Donovan. That's more important than making Dave van den Bergh happy.

Abbott has said that MLS made proposals to help appease the players on certain fronts. But the league has no intention of abandoning the very careful system of central contract management that has led to survival and then moderate growth over the past decade. While clubs in Europe either struggle to compete at all or spend themselves into oblivion, MLS has chosen to put the bottom line first and to try to find ways to slowly increase interest in its product. If the players think they're going to change that this week, they're mistaken. Hopefully the message gets through before a work stoppage results.