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The haves and have-nots: Explaining LAFC’s salary structure

Why are salaries so unbalanced? It’s the system LAFC work in.

MLS: Colorado Rapids at Los Angeles FC Kirby Lee-USA TODAY Sports

The salaries of MLS players are back in the news after the MLS Players Union released the fall salary figures for the 2018 season this week.

If you’ve followed MLS for a long time, you probably understand why a team’s salaries like Los Angeles Football Club’s had a few players making over $1,000,000 (on up to Carlos Vela, making more than $6,000,000 this year), a handful of guys in the middle, and a bunch of guys making less than $100,000.

But if you haven’t spent your nights studying MLS roster construction rules or previous salary drops (and that’s ok!), it’s worth explaining the disparity between the high earners and those near the bottom. Here are a few key points to add some context to those numbers for LAFC:

It’s all about the system

No, I’m not talking about a style of play or anything like that here. I’m talking about the system LAFC and all MLS clubs operate in.

There are two key facets of it that underpin everything a team does in terms of its salary figures: The salary cap and single-entity structure.

The first is broadly speaking easier to understand, with salary caps being common in other American pro sports. MLS has a combination of a “hard” and “soft” cap. Basically, there’s a set amount that MLS teams can spend, but there are a lot of exceptions around that, making it more of a soft number than an out-the-door limit.

The way this is most clearly manifest relates to Designated Players. Each team can have up to three players, with those contracts taking up a portion of the salary budget, but money spent above a certain set number does not count towards the cap. Basically, teams can spend, within reason, as much money as they want on those three players. That’s how you end up with Carlos Vela making more than $6.2 million this year, far and away the most on LAFC.

But it’s still a cap system, and that’s why so many players are on deals of less than $100,000/year. The salary budget is less than $4 million this year for MLS teams, but again, there are tons of exceptions. There aren’t so many exceptions, however, that all players benefit. The Designated Player rule and Targeted Allocation Money allow teams to sign a more notable class of players than teams would be otherwise allowed to do, but the rest of the system is limited by a budget.

That second factor, single entity, plays a role here, too. Basically, MLS is structured differently than basically any pro sports league in North America or any other major soccer league abroad. Everything is centralized, and the point of the system is to prevent rampant competition between teams, driving up salaries as they enter bidding wars. Salaries across the board have grown, but salaries at the bottom end remain low in part because of the cooperative nature of the league’s structure. That’s not to say there isn’t competition, period, but the system is built to limit competition between teams, with the intention of reigning in costs. And that is ultimately passed on to the majority of players.

The history factor

Believe it or not, but salaries, even at the bottom end, have gotten significantly better over the past decade. Time was in MLS players at the bottom of the order were making somewhere around $10,000 a year, needing to take an extra job or two in order to make ends meet.

Now, the minimum is north of $50,000. Compared to baseball, basketball, football and hockey, does $50,000 seem quaint? Yes. But as more money has poured into the league, and the number of millionaire salaries have increased, so has the salaries around the rest of the roster, to an extent. We’re a long way off from the whole league making at least $500,000 annually, in part because soccer remains an emerging sport in this country and in part because there isn’t the history driving the salaries up to compare to the other pro sports in the U.S.

In fact, the reason why we even see the salary figures from the MLS Players Union is as a way of shaming cheap owners into paying players more. Some players aren’t thrilled to have their salaries made public for everyone to see, but the reason it’s done at all is as a bargaining tactic, to overcome MLS’s historic reluctance to talk specifics about money and to show just how little some players make. And again, it’s a tactic that has worked.

Are LAFC being fair?

I’ve seen some comments around LAFC fans that claim the team is sitting on a pile of tinder, with a few players getting paid many times more than their teammates and the obvious resentment that will result and divide the locker room. Is that possible? Maybe, but if it was, it would be happening in all MLS team locker rooms, and as far as I can tell, it doesn’t.

Players know what they’re getting into, even if salaries are being artificially depressed (which they are, just like they are in every system where there’s a salary cap). A first-year player knows he will not make anything remotely close to Vela, and if he pays any attention to MLS salaries, probably has an idea of the range where he’ll sit in terms of his salary.

All of this, of course, is not to say that there aren’t LAFC players who deserve raises. Of note, Tyler Miller is a steal, and is due for a raise (although it probably won’t be as high as many of you expect!). Latif Blessing is another player who is cited for making far less, under $100,000, than he deserves.

So yes, there are definitely LAFC players who deserve to make more money, even within the structure of MLS’s salary structure. A big question this offseason is who will remain with the team with a significant raise and who will move on, either because he wants to make more and can’t get it from LAFC, or LAFC can’t make the numbers fit and have to let him leave. Now that LAFC have a roster to carry over, that will be one of the most fascinating developments in the offseason. But as far as the numbers themselves right now, LAFC are just like the rest of MLS, and don’t expect any major changes on how salaries are doled out in the years to come.

What do you think? Leave a comment below!