Major League Soccer
The Management POV: Kevin Payne Talks CBA
The players' perspective is well articulated in the current MLS labor negotiations—but what is going through the minds of the guys wearing suits? ASN spoke with former MLS exec Kevin Payne to find out.
BY John D. Halloran PostedKEVIN PAYNE IS ONE of the most experienced executives in the American soccer community. A former deputy executive director and director of marketing for U.S. Soccer, Payne was also a founder of Major League Soccer’s D.C. United franchise and served as the team’s president and CEO. Later, Payne served as the president and general manager of Toronto FC and currently serves as the CEO of U.S. Club Soccer and as the global soccer strategist for Buffalo Brand Invigoration Group. Payne spoke with American Soccer Now’s John D. Halloran about the league’s ongoing Collective Bargaining Agreement negotiations. While he made it clear that he was not speaking on behalf of the league and is not a part of the current negotiations, he does offer fans a unique perspective into the thinking of league executives. The interview below has been lightly edited. AMERICAN SOCCER NOW: In the current CBA negotiations, what do you think are the biggest hurdles between the players and the owners? KEVIN PAYNE: Broadly, there are three issues that the two sides disagree on. One is money. The players want more, the league wants to pay less. Two is work rules. That’s something that people don’t concentrate on very often—it’s not very sexy and it often doesn’t get reported on. But those are actually very important issues and end up being matters of considerable expense. The third, and probably most intractable, is free agency—players' ability [to move freely through the league. ASN: You mention “work rules”—can you give an example of what that means? PAYNE: Things like the length of the season—when preseason starts, how many days per month the players work—there’s a lot of details that fall under that category that people don’t really think about, but that a lot of time gets spent on in a CBA. CLICK HERE: WHAT'S YOUR TAKE ON MLS' LABOR STRIFE? ASN: Being a former team president and GM, what is the downside that fans don’t see about offering the players free agency? PAYNE: To take it to its logical extreme, it could mean potentially the end of the league. If the cost of labor becomes unsustainable, which it very nearly did back in 2001, then the league is not going to remain in business. Obviously, I’m not suggesting the league is in danger of going out of business anytime soon. But this is real money. The way the media covers sports and the way fans follow sports, they act like this is monopoly money and it’s really not—particularly in MLS. It’s one thing in leagues like the EPL, where they have enormous television contracts (although a substantial number of teams in the EPL lose money). And a fair number are not in very good shape financially—the only thing that saves them is their television deal. Here, the league doesn’t have a television deal of that magnitude yet. So, when you see teams spending enormous sums of money on individual players, that’s a big, big bet by that club that they can drive additional revenues, particularly on game day. If, all of a sudden, every player on the team is making considerably more money and there’s no attendant increase in revenue, that’s a big problem. It’s difficult to understand why fans would pay more money to go see the exact same players, just because [the players] are making more money. It’s one thing to bring in David Beckham or Kaka. It’s another to pay your left back three times as much money because another team in the league is foolish enough to pay him two-and-a-half times as much as he’s making. ASN: Do you feel that player salaries now are just the fair market value and that’s just the way it is? PAYNE: No. I would like, everybody would like, to see the players make more money. I suspect most of the owners would like to see the players earn more money. But they’d like to be able to pay them more money and still get whatever they calculate to be a decent return on their investment. For some owners, that might be making money, for some, it might be breaking even. But I don’t think anybody begrudges the players the opportunity to make a good living. It’s just a matter of what [the U.S.] market will bear. Right now it’s not generating enough revenue to support huge salaries across the board. ASN: Do you think when players say things like, ‘League salaries force us to live off peanut butter and jelly," that they are just being melodramatic? PAYNE: In the last collective bargaining agreement, the players achieved quite a bit. The base salary went up considerably. The apprentice salaries were basically done away with. The per diems on the road were increased substantially—I think they were increased by 50%. Many, many more players today have guaranteed contracts. Almost everybody has a guaranteed contract now. All those things go toward stability. I think there are still some players who probably find themselves playing under their first contract—either because they haven’t proven they deserve a new contract, or because they made a decision on their own not to take a new contract...but I don’t think there’s too many cases of players living on peanut butter and sleeping on a couch. At the beginning of the league, there definitely were. And it was a problem and it certainly didn’t enhance the professionalism or the quality of the league overall. ASN: As someone who was in the league at its founding, do you think players and fans today fail to understand what it took to make MLS a viable professional league? PAYNE: Yes, I do. Generally speaking, I don’t think anybody has much of an idea of what really goes on behind the scenes in any sports league. The fans tend to take it for granted and the media tends to treat it as an abstraction. They don’t look at sports like it’s a business and they don’t consider all of the different factors that weigh on a team. They create this fantasy mentality, that there are no repercussions for the decisions that are made. And actually there are huge repercussions. There has been an enormous investment in MLS since the beginning. It’s been a long, tough haul. The league is doing extremely well right now and everybody is very bullish about the league and the game. And they should be. And I am. But that doesn’t mean the league is out of the woods on a market-by-market basis. The majority of teams still are not making money. ASN: Commissioner Don Garber said that the league is losing $100 million per year—a fact I’m sure the owners are using to argue against higher salaries. Is that stance undermined when teams then go out and sign multimillion dollar contracts for designated players? PAYNE: Look—it is a world market. And that was established as a legal matter in 2002 when the Fraser v. MLS case was settled. If a player in the league is resentful of the amount of money that Kaka makes, then he should go to Europe, win a Champions League with AC Milan and be named World Player of the Year. Then he can come back and demand that kind of money. It’s not a matter of just because we both play in the same league, I should be paid the same as you. The most extreme example is David. David Beckham is an international marketing phenomenon. He is paid accordingly. Kaka is one of the most accomplished players of his generation. David Villa the same thing. Those players are paid accordingly. The vast majority of players not only in [MLS] but in the world have not accomplished what those players have, and they’re not going to be paid that way. ASN: Some fans seem to want to go to a European model and abandon single-entity, but even [UEFA] has realized how wild spending can damage the sport and has instituted financial fair play laws. Do you think the league should keep the salary cap and do you feel that protects the financial integrity of the league? PAYNE: It has gotten completely out of control. You have clubs that are owned by the "sovereign wealth fund" of oil-rich nations. You run a real risk of all sense and reason being thrown out the window. What UEFA has done is significant. It’s very complicated and difficult to police properly, but they have tried and I give them a lot of credit for that. I think the fans are somewhat delusional about that. It’s not that anybody in the league doesn’t want to be successful. In terms of business people and the quality of ownership in our league, I would absolutely tell you it is a far higher quality of ownership—when you look at resources, business accomplishments, and commitment—than the EPL or La Liga. There’s no comparison. [MLS ownership] compares very favorably to all of the [other] American leagues. There are a lot of very smart people who know how to build a business for the long term. The fans should have confidence in people like Phil Anschutz, or the Hunt family, or the Kraft family—they know how to build something that will sustain itself for the long haul. ASN: How do these negotiations compare to the original CBA in 2004, or the 2010 re-negotiation when you were still in the league? PAYNE: Each one has its own challenges. My guess is that each succeeding process will become easier in some ways, in the sense that there will be more experience—particularly on the part of the union—but harder in other ways because as the league enjoys more success, the players are inclined to become harder in their positions and will no longer have the fear that a precipitous move could end the league. It’s very challenging. I know there are very good people on both sides of the bargaining table who want the best for the league and want the best for their constituency and are honorable. I am confident this will get resolved in a matter that’s not entirely satisfactory to either side but that the two sides can live with. ASN: Do you think we will see a work stoppage? PAYNE: I certainly hope it won’t happen. I guarantee you, if you go back and look at news stories from this time four years ago, you’ll see everybody wringing their hands about a work stoppage. If you could look into the future, at this point in negotiations, you’ll see the same thing. There’s always going to be increased tension as the deadlines draw near, as the beginning of the season draws near. But, frankly, that’s when the real work gets done. Neither side, the players particularly, are incented to end the process early. Typically, in any labor negotiation, it has to go down to the wire until both sides feel substantial pressure. It’s at that point that they begin to yield some of their positions and start to try to find middle ground that they can live with. ASN: Do you think the players will get free agency? PAYNE: I don’t have a crystal ball, but I would be surprised. They may get some additional freedom of movement, like they did in the last CBA, but not what you see in the world market. Contracts [there] mean absolutely nothing. The way [player movement] is treated in Europe is insane. I don’t think you’ll see the equivalent of baseball or football free agency. I suspect there will be some additional opportunity for movement for players who have served a certain length of time. John D. Halloran is an American Soccer Now columnist. Follow him on Twitter.
February 23, 2015
February 23, 2015