The successful reception of the 1994 FIFA World Cup in the United States led to the creation of Major League Soccer (“MLS”) in 1996.

In April 2003, the MLS Players Union (renamed the MLS Players Association in 2017) was recognized as the exclusive collective bargaining representative of–and the first labor organization formed by–all MLS players. In December 2004, the MLS and the Players Association agreed to the League’s first Collective Bargaining Agreement (“CBA”). The first CBA raised the minimum salary, guaranteed fully-paid health insurance for all players, increased incentive bonuses, and created a 401(k) for MLS players. The third, and most current, CBA was reached between the parties in March 2015. Under this agreement, the MLS Players Association “expressly waive[d] its right to bargain [for]. . .Homegrown Player rules, regulations, and procedures.”

The Homegrown Player mechanism enables any MLS club to “sign a player to a contract without subjecting him to the MLS SuperDraft if the player has been a member of that club’s youth academy for at least one year and has met the necessary training and retention requirements.” The concept of Homegrown Players–and regulation thereof–has no parallel in any other U.S. professional sports league, although it is a common practice for soccer clubs overseas.

The existing CBA is set to expire on January 31, 2020. During negotiations for the next CBA, the parties will likely revisit the role of Homegrown Players in the MLS, as the rules and regulations pertaining to these particular players have changed significantly since 2015.

The 2017 MLS Roster Rules, for example, introduced $200,000 of targeted allocation money (“TAM”), which is used by clubs to sign homegrown players to their initial professional contract. Another significant change that occurred in 2017 was the roster cap increase from 28 players to 30 players, with spots 29 and 30 specifically reserved for “Homegrown players.” The impetus behind these regulatory changes was to encourage MLS clubs to invest in their youth academy programs, and the changes were largely successful on this front. ESPN reported in 2018 that, during the ’16 and ’17 seasons, the MLS spent nearly $40 million on youth development, upgrading their training facilities, and bolstering the club’s academies.

Under the 2019 MLS Roster Rules and Regulations, each MLS club’s allotted salary budget is currently $4,240,000. The allocation for each club, however, is further divided into three rosters: the Senior Roster (spots 1-20), the Supplemental Roster (spots 21-24), and the Reserve Roster (spots 25-30). The minimum and maximum salaries differ significantly based on which roster a player falls in. MLS teams have an incentive to sign a Homegrown Player because he does not count against the team’s salary budget unless he occupies a spot on a club’s Senior Roster. Yet, in 2018, only 13 out of 109 homegrown players were part of a Senior Roster. As such, a Homegrown Player’s salary only cuts into a club’s salary budget in very limited circumstances. Since clubs are hesitant to bring Homegrown Players onto the Senior Roster because of financial ramifications, it seems that the only reasons the Homegrown structure is financially advantageous are because of the League’s scarcity of funds, limited roster space, and the salary-specific rules for the rosters.

Given the MLS’ current regulations, the MLS Players Association should advocate for a CBA that better captures the changes in homegrown players rules, as reflected in both the the 2017 and the 2019 MLS Rules and Regulations. Rumors surrounding the CBA negotiations suggest the next CBA could reflect the changes made in the 2017 and 2019. Paul Terino, for example, claims that the MLS is considering “. . . . significantly altering the salary budgets–many GMs would like to see the number triple, at least–and potentially increasing the size of both the senior and reserve rosters.”

Benjamin Joseph

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