For Orlando City, that means buying down the contracts of their designated players (Kaká, Carlos Rivas, Bryan Rochez) to open DP spots for new, high profile players.
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MLS clubs will receive an additional $800,000 in Targeted Allocation Money in both 2016 and 2017.
TAM was first unveiled by MLS last summer, in the form of a $500,000 cash infusion teams could use over the course of the next five years.
While that amount may seem paltry in comparison to some of the big-time European clubs, it is a significant increase giving the 20 teams more clout when signing new players. On Thursday, the league injected another $1.85 million per team in spending to be used over the next two years with an aim on improving the core of its rosters.
The league also announced an addition $125,000 per team to be spent on homegrown players, keeping them from counting against the salary cap and encouraging teams to bring players from their academies.
Major League Soccer will commit an additional $37 million in league-wide player compensation over the next two seasons, the league announced Wednesday. That will allow teams to bolster their roster beyond their top-paid performers, who usually are Designated Players. MLS believes that this expansion, the largest expenditure on player compensation since the DP program began, will allow for teams to sign more impact players to come to MLS while also allowing for teams to re-sign key players now on their rosters.
In order to do that, the league knew it must increase the quality of play and that the path to better play is a greater investment in the on-field product. Specifically, it can be used to pay a player making between $457,500 and $1 million per year so that the player does not count as a designated player.
The expanded TAM program will essentially create a second class of Designated Players – of which each team can have just three – which the league hopes will allow its clubs to add two or three impactful signings apiece.
Teams can carry over the 2016 money to 2017, but not the other way around. Orlando City now has three designated players – Kaká and young DPs Carlos Rivas and Bryan Róchez – and could also use the TAM to buy those players down to add a new designated player. The Galaxy could use the new wave of allocation money in a similar fashion and though that wouldn’t get Gonzalez completely under the limit, the new rules would allow the Galaxy to trade for funds to close the gap. The 2016 chunk must be committed by the conclusion of the 2017 secondary transfer window, while the 2017 portion must be committed by the conclusion of the 2018 secondary window.
“It’s very clearly earmarked for players in an area where we need to have more players”, said Executive Vice President for Players and Competition Todd Durbin. The minimum budget charge for a player compensated with Targeted Allocation Money is $150,000.
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Clubs retain the flexibility to convert players bought down with TAM into Designated Players if they have a free Designated Player slot. Basically at the end of the day there will be more money to spend on players. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.
