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Major League Soccer Institutes Free Agency For First Time in League History

By Daniel S. Greene

This year marks the 40th anniversary of the first sports league to institute free agency. While the famous Flood v. Kuhn case (which challenged Major League Baseball's (MLB) reserve clause as a violation of antitrust laws and the 13th Amendment) started the ball rolling for free agency, it wasn't until 1975 when free agency became an integral part of MLB. After outfielder Kurt Flood lost his case 5-3 in the United State Supreme Court in 1972, pitchers Andy Messersmith and Dave McNally challenged the ruling just three years later. In December 1975, all MLB players were granted the right to free agency, thanks to arbitrator Peter Seitz, who overturned Flood, and ruled that players had the right to free agency after playing one year without a contract, banning the reserve clause's applicability to MLB. This decision led the way for future sports leagues to allow free agency for its players, including the National Football League in 1992, National Hockey League in 1995, and National Basketball League in 1996 (http://www.villanovau.com/resources/bls/history-free-agency-pro-sports/#.VahWsxNViko).

This past Thursday, Major League Soccer (MLS) players ratified a new five-year Collective Bargaining Agreement (CBA) that runs through 2019, after 91% of the players voted in favor of ratification (http://www.mlssoccer.com/news/article/2015/07/16/mls-players-union-announces-it-has-ratified-collective-bargaining-agreement?utm_source=Twitter&utm_medium=referral&utm_content=News&utm_campaign=Unpaid). While many important new items were introduced into this version of the CBA, arguably the most important one is the creation of free agency for the first time since the league's founding in December 1993. Under the new CBA, free agency applies to players who are 28 years old and have at least eight years of MLS service, are below the maximum salary, and are within certain salary limits:

- Players earning less than $100,000 can negotiate a raise of up to 25%
- Players earning between $100,000 and $200,000 can negotiate a raise of up to 20%; and
- Players earning $200,000 and above can negotiate a raise of up to 15%.

In addition, the percentage increases may be raised if a player significantly outperforms his or her contract (http://www.rslsoapbox.com/2015/7/16/8982515/players-union-ratifies-mls-collective-bargaining-agreement-details).

This form of free agency seems to be beneficial to both sides. "The players were very focused on having more freedom of movement and we've been able to provide that," said MLS Commissioner Don Garber. "Everyone wins. Our owners are able to protect their system and players are able to achieve more movement." Under the old CBA, players with expired contracts could be re-drafted by other teams, but only at the player's current salary. Therefore, not only were players unable to increase their salaries, but they were also unable to choose where they could play (http://www.nytimes.com/2015/03/05/sports/soccer/mls-and-union-reach-deal-giving-free-agency-to-veterans.html?_r=0).

The implementation of free agency has come at a very good time for the MLS, as the league has expanded rapidly over the past few years. While only 10 teams existed in the 1996 inaugural season, that number has doubled this season, with New York City FC and Orlando City SC joining the league for 2015. While expansion has led to an increase of players and fans, free agency means (hopefully) more money for MLS players. One just needs to look at the effect of free agency in the other sports. For example, in 1975, future Hall of Famer Hank Aaron was the highest paid player in MLB at $240,000 per year. Yet a year after the Seitz decision, future Hall of Famer Mike Schmidt earned a league-high $560,000 per year. Similarly, in 1992, the NFL average salary was approximately $484,000, but increased to $667,000 per year just a season later (http://www.villanovau.com/resources/bls/impact-free-agency-pro-sports/#.VahkLBNViko). Today, many athletes are signing contracts for millions of dollars per year, which is large in part to free agency.

While it is unknown how much free agency will impact player salaries, considering that MLS is relatively smaller and less wealthy compared with the other major North American sports, and as free agency is limited to only certain players, it is very likely that MLS players should see an increase in their annual salaries in the upcoming seasons. With the popularity of the USA men's and women's soccer teams, the growth of the MLS, along with its new television and sponsorship deals, and now its acceptance of free agency, it seems that soccer in the United States is on an upward trend.

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