By Ben Nicholson
July 10 – The rumors that the MLS is to introduce a ‘Core Player’ materialised on July 8 in the form of ‘Targeted Allocation Money’. The new rule amounts to each MLS club receiving $100,000 per year for the next five years for the purpose of investing in their roster outside of their player salary budget.
There are four ways the money may be used:
1. Clubs may use the funds to sign a new player provided his salary and acquisition costs are more than the maximum salary budget.
2. Clubs may re-sign an existing player provided he is earning more than the maximum salary budget.
3. Clubs may buy down the budget charge of an existing Designated Player (no longer making that player a DP) provided the club concurrently signs a new Designated Player at an investment equal to or greater than the player he is replacing.
4. Clubs may trade their Targeted Allocation Money to another club.
Though the additional amount enables clubs to effectively add a fourth DP to their roster, they are still limited in respect to the type of players they can bring.
Adding $100,000 on to a $436,250 yearly salary is unlikely to seduce stars like Steven Gerrard and Andrea Pirlo. This remains true even with the opportunity to bring forward a portion of or all $500,000 of the Targeted Allocation Money (TAM) to use in a single season on up to three players.
Instead, the TAM will likely be used to obtain higher calibre domestic players, or ‘almost-star’ imports.
There are many current Designated Players (DP) who could find the Targeted Allocated Money (TAM) being used to bring them out of the DP category. Based on the salaries of designated players in 2014, at least 17 players could have TAM relegate their DP status.
Further, the likelihood of the investment occurring is heightened by the nature of the monetary gift from the MLS. With MLS covering the extra cost, clubs can just shift around what they are already spending without necessarily reaching deeper into their pockets.
It should be noted, though, that currently there are around 10 DP spots still open across the league. For those clubs, like Columbus Crew, who are not maxed out with three DPs, the TAM does not provide the same relief as it does to LA Galaxy and NYC FC. Therefore, it could be argued, that the new rule may serve to pull teams apart and establish wealthy elites.
Todd Durbin, MLS’s Vice President of Competition and Player Relations, summarized three things that the new rule does: “One is, you can go out and sign new players. Two is, you now have resources to keep important existing players that you might have lost overseas traditionally. [Third is] we’ve just injected $10 million into the system, and the money is tradable, so it’s going to start to flow in the background efficiently.”
The TAM operates very similarly to the current general Allocation Money rule. The significant difference is that the TAM can only be used on players who earn above the salary cap, whereas the general Allocation Money can be deployed on earners below the cap, thus encouraging teams to collect more DPs.
Conceiving this encouragement as the goal, the rule may not then just serve to establish a wealthy elite. If more clubs are successfully induced to invest more in players who require more than the salary cap, these clubs could be brought closer to their freer-spending competitors by bolstering their squads at a reduced rate.
This theory is consistent with the comments made by Durbin, who claims the TAM provides an equal opportunity to all clubs.
He stated, “[w]hen we took a step back and we looked at our rosters and the way in which our teams put them together, we realized that while we’ve been making substantial investment in a number of areas – designated players, youth academies, increased salary budget, etc – one area we felt we needed to drive even more investment toward is players who are making high-level salaries that are going to be difference makers on the field.”
A more skeptical eye could see this new rule as simply a temporary fix so LA Galaxy may acquire Giovani Dos Santos (pictured) during this transfer window. The theory goes that the club could buy down their lowest paid DP, Omar Gonzalez, and therefore free up a DP slot for Dos Santos. This would cost Galaxy 80% of its TAM and leave them over the salary cap for the following season.
LA Galaxy, at least, will not be concerned about the provision that clubs are required to use any remainder of the $100,000 from one year in the following year or else lose it.
One theory as to why LA Galaxy would pursue this route is in expectation that the MLS will create a new rule next year that will bring them back in line, by, for example, adding another DP slot (which is unlikely because otherwise they could more easily have just introduced that instead of the TAM rule) or something alike.
Whatever the case, the MLS has managed to make things even more complicated. However, they only ever committed to providing transparency. And this they have certainly achieved through displaying the rule, even if it so complicated as to elude comprehension. The motivations for the rule and the likelihood of future amendments, though, not so much.
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