Is The 2021 MLS Season In Doubt?

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Friends,

In a surprising move, Major League Soccer invoked the force majeure clause in its Collective Bargaining Agreement (CBA) yesterday — officially notifying players they need to negotiate a new agreement due to COVID-19 restrictions inevitably impacting 2021 league financials.

In simple terms, the MLS lost $1 billion in revenue last year due to the COVID-19 pandemic, doesn’t see a legitimate path forward without fans in the stands — their single largest revenue source — and has now opened a 30-day window to renegotiate the CBA or potentially face a lockout.

To my knowledge, the MLS is the first US professional sports organization in history to invoke a force majeure clause.

The craziest part?

It’s not like the CBA is 5+ years old, the deal was agreed upon and signed less than a year ago — even being amended before the league restart in June.

As you can imagine, MLS players aren’t happy.

Here’s the official statement from the MLS players’ association:

While the decision to invoke the Force Majeure clause in the Collective Bargaining Agreement is historic and potentially unprecedented in nature, it’s not exactly surprising.

Here’s how I think about it…

MLS Commissioner Don Garber said the league lost nearly $1 billion in revenue last year, but MLS clubs only made about $800 million in total revenue just two years prior.

From a financial perspective, that’s obviously concerning.

Unlike other major US professional sports leagues — think NFL, NBA, and MLB — which make billions of dollars annually from their existing TV deals, the MLS brings in only a fraction of that — $90 million annually to be exact.

Given the majority of their revenue comes via sources related to in-person attendance — ticket sales, merchandise, concessions, etc. — the MLS was hit much harder than other US professional sports leagues on a percentage of revenue lost basis.

The result?

Force Majeure.

By invoking force majeure, the MLS is attempting to renegotiate the CBA they agreed to in February for the second time in ten months.

What am I talking about?

In June, after the league shut down but before the restart, the MLS & the players’ association agreed to a 5% reduction in players’ 2020 wages as well as a $5 million cap on performance and individual bonuses.

This brings me to my next point…

I assume MLS players and their respective association aren’t necessarily frustrated that the CBA needed to be amended — similar to the NBA & NFL, they already did that — the problem is that the MLS now wants to do it again.

Simply put, it’s unacceptable — especially considering the MLS knew back in June that health & safety guidelines would most likely have an impact on fan attendance in 2021 also.

Then again, the MLS may have no other choice.

In the end, given neither the league, its players, or the individual franchises can afford a lockout in 2021, I think it’s almost a certainty they come to a deal within 30 days.

The real question becomes, what does that deal look like?

On that front, your guess is just as good as mine.

It’s been a crazy year, but I hope everyone enjoys the next few days with their family and friends — whether you’re remote or in person.

Happy New Year and we’ll talk in 2021 :)

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