The deal, announced on Thursday, includes two marquee provisions that set the upstart league apart from the rest of American sports. First it will eliminate the draft, allowing newcomers to the league to pick which team they sign for. Second, it will lift any limits on the earnings potential of individual players.
The NWSL decided to do so after a bout of self-reflection, according to its commissioner Jessica Berman.
Berman said since being appointed commissioner in March 2022 she had numerous conversations with the board about whether the NWSL should emulate American sports leagues like the NBA, NFL, and NHL, or soccer leagues from other countries. “There’s friction that exists between those two worlds,” Berman told Fortune. “The sport of soccer is a global game, we operate our business in the US.”
Ultimately the NWSL decided to split the difference, ditching the draft altogether but keeping American-style salary caps albeit with a twist. Under the new agreement, teams will have a fixed salary cap, however, they can spend it with far fewer restrictions than other American sports. Namely, teams will be able to pay a star player however much they would like, provided they remain under the salary cap. Players also can’t be traded without their consent, as is currently the standard in other major sports leagues.
“There’s immense power in players having autonomy and control over their careers,” said NWSL Players’ Association executive director Meghann Burke in an interview Wednesday night.
Under the new agreement the salary cap for NWSL teams rose to $3.3 million, up from $2.75 million under the previous deal signed in 2022. The minimum salary increased from $35,000 to $48,500, a 38.5% increase. By the end of the deal in 2030 the salary cap is projected to increase to $5.1 million and the minimum salary to $82,500.
These new changes were an effort to adapt the league to the global realities of soccer, the world’s most popular sport, according to Berman. “Soccer is one of the few sports where there is truly a global labor market for talent,” she said.
In virtually all U.S. sports, both men’s and women’s, the draft is considered a rite of passage that marks the moment an amateur player turns pro. But in the rest of the world it’s often seen as an American peculiarity, one that often prevents a player from choosing where they will ply their trade.
“We’ve accepted this paradigm of sports that I don’t think a lot of American sports fans really understand, until they think about it, that that’s not the way the rest of the world does it,” said Burke, who was a professional player before getting her J.D. in labor law from Northeastern University School of Law.
Over the past two years the NWSL has been at the center of an investment bonanza in women’s sports. Earlier this year the league added two new teams and attracted a slew of high-profile investors. Disney CEO Bob Iger bought a majority stake in the Los Angeles-based Angel City FC. The league has also managed to draw institutional investors. In April 2023, the private equity firm Sixth Street Partners, known for its major sports investments, bought the NWSL’s San Francisco team Bay FC.
But as the NWSL’s fortune’s grew, so did those of other women’s leagues. Like in the U.S., women’s soccer in Europe has undergone a financial boom in recent years. In England (which is also home to the most lucrative men’s league) revenue for the Women’s Super League was up 50% in the 2023-2024 season. A March 2022 in the Women’s Champions League, the continent’s premier competition, between Spanish giants Real Madrid and Barcelona set an attendance record with over 93,000 fans.
The need to act became even more apparent after the 2023 Women’s World Cup in which the U.S. was eliminated in the first knockout round, Burke said. She said she realized it was “undeniably true” that “the world is passing us by.”
After that disappointment the U.S. and the NWSL realized they had to adapt in order to regain their perch atop the soccer world. “We compete for the world’s best talent in the global market, and so it really didn’t make any sense to play by one set of rules, while all our competitors in England and Spain and France and Germany and Mexico play by different federal rules, especially when those rules give them the advantage,” Burke said.
In addition to the draft, standing in the way of recruiting that global talent was a practice known as service years, which dictated how long a player had to have been in the league before they were eligible for free agency. The rule made it harder for players to move between teams when their contracts expired. Typically, the most sought-after players are eager to enter free agency because it opens up a bidding war for their services among teams that want to sign them. Over the last year, free agency has been a contentious topic between the NWSL and the players’ union, ending up in an arbitration dispute on more than one occasion.
The new CBA allows all NWSL players to enter free agency whenever their current contract expires without needing to accumulate service years. The contract does still keep the salary cap in place, long used as a way to encourage parity among teams in American sports, which Berman cited. However, teams can allocate that among individual players however they see fit.
Berman said she hoped the new policy would give team’s more flexibility in how they built their rosters. “It’ll be up to the team if they want to fill their roster with 21 times the minimum and sign one big-time player or smooth it out so that they’re being more prescriptive about different positions,” she said.
The timing of the deal was also notable for a collective bargaining agreement. It came roughly two and a half years before the expiration of the current deal at the end of the 2026 season. According to Burke, in order to reopen negotiations, especially at such an early date, the NWSLPA had one clear request: that the league adopt the same policies as the rest of the soccer world. “That was the Rubicon they had to cross for us to consider renegotiating a new CBA,” she said.
