MLS Salary Guide: Do you often find yourself intrigued by the financial side of Major League Soccer (MLS), but need help understanding the fine print? The MLS has just released its 2023 Salary Guide, providing in-depth salary information for each player as of April 30, 2023.
To help make sense of this document, let’s delve into some crucial terminology and calculations within the guide.
The guide gives you an in-depth look into two key figures: the ‘Current Annualized Base Salary’ and the ‘Annualized Average Guaranteed Compensation. The former is self-explanatory; it’s what a player earns annually. But what about the latter?
Annualized Average Guaranteed Compensation
The ‘Annualized Average Guaranteed Compensation’ (‘Guaranteed Comp’) includes a player’s base salary and any signing or guaranteed bonuses, which are annualized over the player’s contract term, including option years.
For instance, if a player has a $500,000 base salary and receives a $100,000 signing bonus on a two-year contract with two one-year options, their Guaranteed Comp is $525,000. That’s the base salary plus the signing bonus, divided by the total contract duration (in this case, four years).
This figure also considers any marketing bonuses and agent fees, again annualized over the contract term. However, it does not include Performance Bonuses as they are not guaranteed. The compensation comes from a player’s contract with the MLS and excludes any compensation from contracts with individual teams or affiliates.
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Average Base Salary Calculations
So, how are the averages calculated? The Average Base Salary for Senior Roster Non-Designated Players is determined by including only players in the Senior Roster Category (excluding Designated Players, Supplemental and Supplemental Reserve players) and calculating the average of these players’ base salaries.
The guide also provides the ‘Average Base Salary by Roster Spot’. This is done by taking the senior roster for each team, ranking players by their base salary from highest to lowest, and then averaging the salaries by roster spot.
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‘ Designated Player’ (DP) might also catch your eye. This allowance allows clubs to acquire up to three players whose total compensation and acquisition costs exceed the maximum budget charge. This provision, introduced in 2007, will enable clubs more financial leeway to attract high-profile players.
A club’s ‘Senior Roster’ is also a key term. This refers to the 18-20 players whose salaries count against the club’s budget. Any shortfall in filling these spots is treated like the club pays a player earning the Senior Minimum.
The guide also refers to ‘Supplemental’ players. These are players occupying roster spots 21-24 who must earn at least the Senior Minimum and those in spots 25-30 who may reach the Reserve Minimum but must be 25 years old or younger.
Special slots 29 and 30 are reserved for Homegrown players. Importantly, these Supplemental and Reserve players are “off-budget” and therefore don’t impact a club’s main budget.
MLS Salary Guide: Finally, the guide provides:
- The ‘Senior Roster Non-Designated Player Average Base Salary’.
- Giving you an average salary figure for any Senior Roster player.
- Excluding DPs and “off-budget” players.