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Report: MLS are Cutting Some Employees Pay, Sporting KC Responds

Still no soccer on the immediate horizon and some MLS staff, not players though, are being impacted.

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Houston Dynamo v Sporting Kansas City
Clearly this is before current social distancing guidelines.
Photo by Jamie Squire/Getty Images

According to Yahoo Sports, pay cuts are coming at MLS headquarters.

“Major League Soccer will decrease the salaries of most of its 300 New York City-based employees in response to the financial impact caused by the coronavirus pandemic.”

The league will also “temporarily freeze new hires” but they will not lay off or furlough any “full-time workers for now.” Those at the top, and rightfully so, will take the biggest pay cuts with “MLS commissioner Don Garber and top deputies Mark Abbott and Gary Stevenson [taking] a 25 percent reduction of pay.” Others in the organization will take 10 to 20 percent cuts.

Some lower, entry-level and lower-compensated works will fortunately not have their pay impacted.

Sources also confirmed to Yahoo and to The Athletic that “MLS players will continue to be paid their full salaries by their clubs.” Wildly, at this time May 10th is still the expected return date, though that seems unrealistic (Forbes says July is more likely). If games are missed, Doug McIntyre at Yahoo states, “if the 2020 MLS season can’t resume until deep into the summer and the full slate can’t be played, players would almost certainly have their salaries slashed.”

Sam Stejskal at The Athletic on the other hand says otherwise.

“Multiple sources said that MLS player contracts do not include force majeure clauses — mechanisms by which one or both parties in a contract are released from liability thanks to a major event out of both parties’ control, such as a global pandemic. If such a clause were to exist in player contract, it could allow the league to slash player pay. As of now, any cuts would have to be agreed to by players and the MLS Players Association.”

Another complicating factor for MLS is that, unlike many of the worlds biggest sport leagues, they make a lot of their money on game day. A disproportionate 40 percent according to Stejskal.

“One executive estimated that most organizations draw around 40 percent of their overall annual revenue from home games, where they earn income from ticket, concession, parking and merchandise sales. That percentage would rise if sponsorship money tied to matches is factored in. The more games the league has to cancel or play behind closed doors due to the COVID-19 outbreak, the more of that money gets lost.”

That could make it difficult to pay players and staff. Then again, most MLS teams are owned by billionaires so it’s definitely hard to feel sympathy for them in the same way we can for lower-level staffers and game day employees and the rest of the people who have lost their jobs already.

A Peak into MLS Team Revenue

Another interesting bit that could have been missed when Forbes put out their annual revenue numbers is just how small — relatively speaking — MLS clubs are in the greater business world. Sporting Kansas City are apparently firmly in the “middle-class” category.

“Low-earning teams like Colorado, Houston and Montreal bring in about $20 million per season; middle-class clubs like D.C., Orlando, Cincinnati and Kansas City are typically in the $35-$40 million range; higher-profile teams like Seattle, Portland and New York City have about $50 million in revenue. The biggest earners, Atlanta and the LA Galaxy, to name two, are north of that, with their revenue reaching from $60-$75 million. Those numbers don’t touch those for NHL teams, which, according to Forbes, averaged $165 million in revenue in the 2018-19 season. NBA teams pulled in an average of $292 million in that same campaign.”

That could mean team’s qualify for low interest federal loans to continue to pay employees making under $100,000 per year. Presumably that includes players on a Reserve Minimum Salary ($63,547 in 2020) or a Senior Minimum Salary ($81,375 in 2020) or even slightly above that.

How do Sporting KC Fit Into This?

The Blue Testament reached out to the team for comment on whether staff members would have their pay cut and if game day staff were still being compensated at Children’s Mercy Park despite no games being played.

Here is the answer we received:

“Sporting KC has no comment on reports that the league, or other clubs, are imposing pay cuts. And yes, Sporting KC does have a means of support in place for part time associates.”

So it’s unclear if they are cutting pay in any way for their staff, but they are supporting their part-time associates in some way.

Update: Peter Vermes talked on 810 WHB about a voluntary pay cut he and the other member’s of the club’s senior leadership took.

“We thought it was important for us to understand that this is much bigger than just us as individuals and that there is a lot of difficulty still to come,” said Vermes. “And so we went to ownership and basically volunteered that the leadership group would give up 20 percent of their salary for the benefit of the club and everything else moving forward.”

The Blue Testament will continue to follow these stories as the situation unfolds.