Both Sides Need to Make Concessions to Avoid Disaster in MLS Labor Dispute

Among many fans of international soccer, the MLS, or Major League Soccer, is perhaps best known as the league David Beckham plays in when he is not lacing up for Milan. The quality of the league and the state of soccer in America provide continuous fodder for discussion on internet chat boards and in pubs around the world. However, the fact of the matter is that the MLS specifically, and more broadly soccer in the States, are in a stronger position than ever.

MLS is in its best-ever financial condition, and the league is coming off of a Cup Final featuring its two marquee names, Landon Donovan and Beckham. Stars, including some very close to their respective primes, have begun to see MLS as a real option as they consider their futures. And younger players no longer see the league as a hindrance to their career development as more and more top talents are moving seamlessly to top European leagues directly from America. Additionally, after some hickups in the late nineties and early 2000's, the league has resumed expansion, with new franchises recently being awarded to Philadelphia, Vancouver and Portland. More broadly, US Soccer is in a strong position, coming off last year's runner-up finish in the Confederations Cup and ahead of a tantalizing matchup with England to kick off its World Cup campaign in a return trip to South Africa this summer. Looking ahead to the future, changing demographics in the States point to even greater growth potential for the sport as new arrivals from south of the border with a far greater interest in futbol than football represent an ever growing component in the melting pot that is America.

All of these reasons and more point to an imperative need for MLS players and owners to settle their current labor dispute amicably and avoid a crippling work stoppage, either due to strike or lockout, at the end of this month. At issue are several points, none of which will sound unfamiliar to observers of labor negotiations. Players claim that the pay situation in the league is unfair, dislike the lack of guarantees in contracts, and claim that the league is a cartel which reduces their ability to get fair contracts. On the other side, the league, despite recent success, can point to the fact that most teams still lose money and the tenuous nature of the league itself as reasons behind their lack of willingness to budge. Ownership can point, for example to the failed US soccer leagues of the past, such as the NASL, which famously overextended itself to bring in stars such as Pele and Beckenbauer. However, despite differences, a resolution before the January 31st expiration of the current contract should be the goal of all involved as stakeholders in a venture that could just as easily fail as continue its current course of success.

The history of labor stoppages in US sports leagues should guide the parties in the dispute. Recent examples from much more established leagues, for example, should emphasize the risks of a stoppage. Labor issues in Major League Baseball in the mid 90's disillusioned many fans and allowed professional football to supplant baseball as the national pastime in many Americans' eyes. Attendance dropped as a result, and only recovered during what was, in retrospect, a steroid-fuelled, decade-long, in-game home run derby.  More recently, the NHL has failed to fully recover from its season-cancelling 2004-05 lockout, during which, even in Canada, fans turned to other options.

Despite very legitimate grievances expressed by the players (for example, income for MLS players averaged $147,945 at the start of last season, according to the MLS union, but the median was $88,000 for 323 players listed, obviously far lower than the median in other US sports leagues or other global soccer leagues) the league has most of the power in the dispute for two reasons. For one, FIFA, the world governing body of the sport, has given its blessing to the single-entity structure of the league, claiming that it is a labor issue under US law, and not a violation of its own guidelines. Secondly, it has already been settled in the US court system that the MLS system is not an illegal cartel, mainly because players have the option to play in leagues all around the world. The logic behind this decision has only strengthened with the proliferation of US-born players seeking their fortunes abroad (though how this might be impacted by the Supreme Court after hearing oral arguments in the American Needle case next week is not exactly clear.) Therefore, the structure of the league, which exists as one entity that negotiates contracts of players and handles decision making, albeit with input from a few powerful owners, has been validated by both the governing body of global soccer and by national law, making it nearly impossible to crack.

At the same time, and despite great power, the league needs to recognize that concessions will be necessary to stimulate further interest, and therefore growth in the league. A median income of less than $90,000 per season is not enough to attract top foreign talent in large numbers, nor is it enough to retain top young, US born talent. This is, in part, why many twentysomething Americans find themselves in places such as Greece and Denmark. True, Europe is a dream destination for many soccer players growing up in the US, but if you aren't in a country such as England, Germany or Spain, among a few select others, it is more likely financial considerations than career development that drive the decision to cross the pond. The league has made some strides on the salary front with the advent of the designated player slot, also known as the rule change making it feasible to bring Beckham to Los Angeles. However, there have been rumblings that even this backfired after some players on the regular payscale noticed the discrepencies.

Ultimately, it may be that to make money is going to take money. It doesn't take a statistician to note the impact that Galaxy, with stars Beckham and Donovan, make upon attendance numbers. This is because these marquee players attract crowds. Notably, the Galaxy, despite spending big money on star salaries, are one of the few teams in the league that can claim they are profitable. Increasing median salaries will make it easier to retain talent, keep that talent satisfied despite the higher salaries of designated players, and attract foreign talent in higher numbers. All of these will have the obvious impact of increasing the level of play, attracting larger crowds, and ultimately, driving success on and off the field.

Both sides in the MLS labor dispute need to be realistic in the coming weeks if they are to avoid a disastrous work stoppage. With the benefit of being able to look into the past and see the crippling effect of labor stoppages in more established leagues in what are frankly more popular sports, the reality of the situation should not be difficult for either side to understand.  Included in this reality are the fact that the league has most of the power, the fact that players are what drive the success of the league. When both sides understand these main points, it will hopefully drive them to come to a mutually beneficial conclusion. Hopefully, for the sake of soccer in the United States, this happens sooner than later.