Update: MLS Contract Options
Last Thursday, the MLS Player’s Association released its 2018 salary guide, which contains each player’s salary for the 2018 season. Combined with data from previous seasons, the salaries provide more information on whether the options years in MLS contracts are valid under FIFA law.
I analyzed this issue in March. The impetus was former MLS player Cyle Larin signing with Turkish club Besiktas. To complete his move, Larin ignored the first of two option years his MLS team, Orlando City, exercised on his contract. Because Orlando and Besiktas settled the resulting dispute without legal action, the status of Orlando’s options was not resolved.
Further, because MLS does not release contract terms, it is difficult to compare its contracts to the prevailing legal standards. While Thursday’s salary release does not cure this problem, it does add more color to the picture.
Notably, the data shows that some MLS contracts may not offer a sufficient benefit increase. Most contract options rise or fall based on the increase in benefits they grant the player. That is, ruling bodies will want to see that the player received a significant enough increase in salary, bonuses, etc. to justify the team’s unilateral option. It is here that MLS’ options are the shakiest.
Ruling bodies determine the appropriate benefit increase on a case-by-case basis. Unfortunately, jurisprudence from FIFA’s Dispute Resolution Chamber and the Court of Arbitration for Sport leaves a wide gap between acceptable and unacceptable increases. For example, the DRC has struck options where the player only received an extra EUR1000 per month during the option year (the Bueno case, noted in my earlier post) and one where the player only received an extra $20,000 for an option year. On the other hand, the CAS has approved a two-year option which increased a player’s salary 25% during the first year and doubled it during the second (the Kyrgiakos case from the earlier post). All this demonstrates is that small increases are likely to fail, whereas large ones are likely to succeed.
But excerpts from the latest contract data show some MLS options hovering close to the scale’s low (invalid) end. Take the option years in New England Revolution midfielder Zachary Herivaux’s contract, which the team exercised before each of the last two seasons. In the two years before his options, Herivaux made $60,000 and $62,500, respectively. The next year, his first option year, his salary only rose to 65,625. For the second option year, it only reached $68,906.25. These increases fall below the EUR1000 per week that doomed the option in Bueno. So it is difficult to believe Herivaux’s options would withstand legal scrutiny.
The increases for some players in Larin’s draft class (2015) may also be legally infirm. For example, New York Red Bulls defender Tim Parker’s salary increased roughly $16,000 in his first option year. This is less than the $20,000 option the DRC previously struck and, depending on the exchange rate, only a small fraction above EUR1000 per month. New York City FC striker Khiri Shelton fared somewhat better. His increase was almost $20,000, which is a material increase from EUR1000, though, obviously, equal to the $20,000 increase the DRC ruled inadequate. Also troubling for MLS, each player’s rate of increase was low. Parker’s salary went up only about $2000 more in his option year than it did the year before. Again, Shelton was better, but still received only a $4500 increase. So based on previous DRC cases, these deals would also be questionable.
Of course, these are snapshots from a diverse and complicated data set. Other contracts have stronger options. New England striker Juan Agudelo’s 2017 and 2018 options would be examples. In 2015, prior to his option years, Agudelo’s base salary was $400,000. The next year, still prior to his option years, that salary rose to $425,000, an increase of $25,000 or 6%. But in 2017, his first option year, it jumped $50,000, to $475,000 — a 12% increase. In 2018, it jumped again, this time to $575,000 — a $100,000, or 21%, raise. While these increases do not quite touch the options previous cases have approved, they surpass the options other cases have deemed insufficient. So if challenged, options like those in Agudelo’s contract would likely survive.
Practically-speaking, MLS’ salary data does not foretell an upheaval of the league’s contract structure. For a multiple reasons, legal challenges could be sparse. But the data does show that, in targeted instances, headaches like the one MLS suffered in the Larin matter could resurface. That is, the league may try to block some players from leaving for foreign clubs, and those players may find that the option years keeping them in MLS are invalid. So while the live controversies may be few, the option year issue could retain a silent power.
