Owners have more to lose on contentious free agency

[powerof11]

Ironically, the stall in MLS contracts talks, as they creep towards their eventual conclusion, is...all about contract talks.

In broad, old-fashioned Brit political farce -- like some old Peter Sellers/Peter Cook skit -- you'd expect that kind of problem at the beginning of the negotiations. You know, the ol' "We can't even decide on the shape of the negotiating table" schtick.

But no, that's not the case here. Instead, we see the two sides apparently getting along just fine on a bunch of typically contentious points, only to stumble over the issue of when a player can ...negotiate a contract.

http://www.rednationonline.ca/Owners_have_more_to_lose_on_contentious_free_agency_feb_23_10_column.shtml

[Cheeta]

I don't quite get the wage escalation argument. In much the same way I don't quite get the reason for a team not having as many DPs as they want. The league operates under a fixed cap, how many teams in the last 5 years didn't spend 95%+ of their wage allowance.

If a club concentrates too much of the cap on too few players they quickly learn a footballing lesson.

As long as the league has a salary cap the wage escalation argument is a red herring.

[BringBackTheBlizzard]

Think that should be Dudley Moore rather than Peter Sellers?

Here is what Paul James thinks about the CBA negotiations:-

http://www.theglobeandmail.com/sports/soccer/mls-needs-to-raise-salary-cap/article1477649/

[TFCRegina]

Wage escalation is actually a natural response, cap in place or not. Typically caps find ways of rising if the bulk of the owners want it. There've been studies, i remember reading about it in my Sports Economics textbook, that show salary caps are actually fairly ineffective unless there is some form of restrictions on free agency. Players can move around and seek to increase the overall league salary budget. It's the basis of competition.

The reason why the owners don't want this to go into play is pretty simple. Players will start capturing more of their Marginal Revenue Product...IE: what a player produces in value for a team. A Player like De Ro is more valuable than what he is being paid, for example, because he's a popular player. He generates additional value on top of his play on the pitch. Danny Dichio would be another example, and probably a better one of such a player. As you move to complete free agency, players tend to capture closer and closer to 100% of their marginal revenue product.

In Europe, where there are few, if any, restrictions on player movement for those out of contract, most teams spend large sums on their players. You could say that players are capturing somewhere around 90% of what they're worth to the club (Also why transfer fees are ridiculously stupid these days). Ronaldo's play on the pitch didn't warrant the transfer fee...it was the shirts he was going to sell off the pitch.

Anyway, so free agency will have players moving to where they're going to be paid well in the league. Salary budgets rise up. In order to compete, most ofl the teams are probably going to want the budgets to rise. They start searching for loopholes or just force an increase in the cap. This is where you start seeing player wages rise.

If restrictions are in place, players cannot move about so freely, and are more or less serfs. In this case, one team can hold the rights and demand fees from other teams. The player is hurt, because they cannot simply sign on somewhere else in the same league, and this forces them to take a lower salary, and capture less of their MRP.

It should be noted that well run teams will not spend themselves into oblivion, and that MLS is unlikely to repeat the NASL disaster, free agency or not in place, simply due to strong corporate facilities.

[Macksam]

So the players want to get rid of restricted free agency?

[ag futbol]

Wage escalation is actually a natural response, cap in place or not. Typically caps find ways of rising if the bulk of the owners want it. There've been studies, i remember reading about it in my Sports Economics textbook, that show salary caps are actually fairly ineffective unless there is some form of restrictions on free agency. Players can move around and seek to increase the overall league salary budget. It's the basis of competition.

This looks a lot more indicative of a monopolistic league like the MLB, NBA, or NFL. As it stands players can earn their fair value regardless of whether MLS pays it to them or not. It's just a matter of getting it elsewhere.

The other thing that's not being picked up there is that the regulations themselves have some negative side effects that to a degree stunt their own purpose. When you're trading for someone's "rights" you've effectively driven up the cost of acquiring that person. Teams also have a negative incentive to overcharge their competition. By driving up the cost in players that are known commodities (have proven their level in the league) you're creating a situation where teams are more likely to look externally for talent. The variance of what you'll get externally is very up-or-down meaning that while the league might be scared of paying someone FMV, by taking someone externally who may be way under or over what they are worth the end result is the same.

[TFCRegina]

So the players want to get rid of restricted free agency?

The players don't have restricted free agency or any free agency at all.

That's the problem.

If the players had restricted free agency, they'd be happy, because they'd have more mobility rights than they currently do. Which is why on MLS Talk I posted something on RFA and how it was the solution to the current situation.

[dbailey62]

The players don't have restricted free agency or any free agency at all.

That's the problem.

If the players had restricted free agency, they'd be happy, because they'd have more mobility rights than they currently do. Which is why on MLS Talk I posted something on RFA and how it was the solution to the current situation.

Exactly. Serioux has played out his four year contract but cannot sign a new contract within MLS unless TFC is compensated. If TFC chooses not to sign Adrian and doesn't want anyone else to sign Adrian, all they have to do is not make a deal with another club forcing Adrian to either retire, go to the USL / NASL, or try and find a gig overseas.

There is something rotten about this scenario.

[TheKottonmouthed1555362307]

Exactly. Serioux has played out his four year contract but cannot sign a new contract within MLS unless TFC is compensated. If TFC chooses not to sign Adrian and doesn't want anyone else to sign Adrian, all they have to do is not make a deal with another club forcing Adrian to either retire, go to the USL / NASL, or try and find a gig overseas.

There is something rotten about this scenario.

Yeah, that's no way to attract new players to your league. There needs to be a FA system put in place where players have some mobility through the league.

It will only strengthen the MLS as then more players will come to play here.