Originally announced in the summer, Major League Soccer’s Targeted Allocation Money mechanism was introduced as a way to allow clubs to attract higher quality players. Now, ahead of the 2016 season, the league has taken that program to the next level.
MLS announced on Wednesday that each MLS club will receive an additional $800,000 in Targeted Allocation Money for the 2016 season and an additional $800,000 for the 2017 season. In total, nearly $37 million will be added to league-wide player compensation during the next two seasons.
“By injecting an additional $37 million into the system, our clubs will be able to strengthen the depth of their rosters by signing more high-quality players,” said MLS Deputy Commissioner Mark Abbott. “We saw immediate dividends this past season with the initial investment in Targeted Allocation Money, and our owners believe that additional spending — especially for players who will impact the middle of our rosters — will make MLS even more entertaining and compelling.”
TAM, which is used to buy down contracts of non-Designated Players making more than the 2016 maximum budget charge of $457,500, was used by several clubs with great success in 2015. Montreal Impact midfielder Johan Venegas, San Jose Earthquakes midfielder Anibal Godoy and Columbus Crew defender Gastón Sauro were each acquired with the TAM mechanism, while the LA Galaxy’s use of TAM allowed the club to pay down Omar Gonzalez’s deal to add Giovani Dos Santos.
The increased TAM must be used at some point in the next four transfer windows and can be traded.
In addition, the league announce an increase in $125,000 per season will be made available to each club to sign Homegrown Players.
“Our academies are developing more first-team players every year, and the additional investment will provide more flexibility to our clubs to sign top young players,” said Todd Durbin, Executive Vice President for Players and Competition. “We have seen former academy players like Gyasi Zardes, Bill Hamid and Wil Trapp become leaders on their clubs, and we expect many more academy players of their caliber to sign with MLS clubs in the coming years.”
What do you think of the increase in TAM and Homegrown spending? Think this can help MLS teams close the gap on other leagues, like Mexico?
Share your thoughts below.
MLS rules are aimed to very specific demographic: lawyers and accountants.
Glad to see that the owners and the league are interested in investing in the players. While this is a baby step (like all MLS steps) it is still positive in seeing the owners and the league continue to invest in the product on the field. We can only hope that the salary cap increase is still greater when the collective bargaining agreement is renegotiated.
Is there any league in any sport with more complicated rules than MLS? I sincerely doubt it. I think they ought to call this the lawyer and accountant employment act. There are so many easier ways to achieve the same result. If it was hard for a GM or manager to come into MLS before and be successful, now it is even more difficult. Just double the salary cap, for Chrissakes.
That would simply lead to wage inflation for the same talent. This mechanism allows teams to bring in better talent that was previously outside of MLS’s price range without making the cash available for lower-skilled players.
Only MLS has such a crazy system. So every other league isn’t as smart? You can achieve the same result with an increase of the salary cap and you give teams more flexibility in how they spend their money. Now they have a lot of money to spend on a few players. As I have pointed out before, for the price of one DP you could get 5 very good players of international quality, giving a team more depth and better overall quality. The MLS approach is basically the star system where you have a couple of outstanding players surrounded by mediocrity.
“The MLS approach is basically the star system where you have a couple of outstanding players surrounded by mediocrity.”
This is my entire philosophical problem with MLS. I could not disagree more with the theory this is “smart” or this is “great for the fans”. This is a horrible system that produces an incredibly bland, generic and parity-filled product that is not fun to watch.
I’d much rather see 11 Cyle Larin’s than the Kaka surrounded by pub-league skill players. I’m so tired of fellow fans and the league commissioner placating to the lowest common denominator or assuming the fans are idiots.
Even as an MLS supporter, this league is stuck in neutral and the bread crumbs they’re throwing out there isn’t enough to retain my interest for too much longer. The league is a farce with too many manufactured bells and whistles that look good on paper but bad on TV.
This mechanism is supposed to force teams to get “mid-tier” players, those between the stars and the pub-league skill players.
Frank and Yevgeniy did a great job explaining why this specific mechanism is needed. To be honest, it’s brilliant and goes to show exactly how smart the single-entity system is. MLS is very intentional about it’s growth, and that is what is what has it so stable and bullish. To answer your question, the NFL, NBA, and MLB all have crazy rules that they need to use to govern their player acquisition and movement rules, and the common fan of those leagues has no idea how they work.
More convoluted nonsense that is fan-unfriendly.
Arguably it’s largely irrelevant to fans but an important tool for teams (that bother to learn and understand the rules). Hopefully TAM will also serve to make NYCFC and other teams possessed by evil foreign powers contenders for the bottom of the standings.
While I understand your premise I do believe league rules, the system as a whole and the functionality is important for fans to understand. The complexity of the league is not fan-friendly and leaves too many questions and not enough answers for roster moves (or lack thereof).
Fans SHOULD be involved and fans SHOULD understand what’s going on. Fans being kept in the dark with made-up rules and rules you’d need a lawyer to decipher is horrible and poorly thought out.
so why can’t they just raise the cap by 1/2 mil?
I had the same question you did, but I think I get it. If they just raised the cap, it would likely translate to guys like Zizzo, Barret, and Wahl making 200k instead of 100k. When it is done this way, it allows each team to replace 2 $200k-300k players with 2 guys like Kljestan/Mix/BWP/higuain/Valeri
But this is exactly what teams need, especially for CCL.
TAM or “GarberBucks” is allocation money given to teams and is that is not part of the salary money given to all MLS teams and which form the Salary Cap. Allocation money is given to teams for various reason. Teams that win the MLS Cup, teams that finish out of the playoff, teams that make the CCL get allocation money in varying amounts. Last year the MLS gave all teams money to target mid range players. Generally TAM is not counted as money against the salary cap. It can be used, though, to “target” certain players salaries. The LA Galaxy used 500K of last years TAM money to “pay down” Omar Gonzales’ salary to below 500K to take him off the books as a third DP and also to not eat up all of the salary cap room the Galaxy had. Other teams used it to keep mid-range players or acquire new ones. The 2015 TAM money could be spread out over 5 years, or, uses all at once. The extra allocation money of 150K is given to teams to encourage the signing of academy players or even USL players to MLS contract. Certain slaries are exempt from the salary cap and one of them are salaries of Homegrown players, which in itself is a boon. Gyasi Zardes went from a rookie Homegrown player to the USMNT, but is still on the books as salary exempt. I am assuming that homegrown players signed using TAM money are still cap exempted which make it a double saving whammy for MLS teams.
Omar gets two more years in LA!
I stopped paying attention to MLS Calvinball stuff a while back, and so I’m behind the times here. Can someone explain this part of the above article to me:
“TAM, which is used to buy down contracts of non-Designated Players making more than the 2016 maximum budget charge of $457,500….”
I thought “making more than the maximum budget charge was *exactly what a DP is*. How can you have a non-DP making more than the max budget charge? Or is this simply bad diction, and what the author meant to say was something like “TAM is used to pay down a DP’s contract below the DP threshold of $457,500, thus making them no longer a DP”? Is that what’s meant here?
You are correct. Some of the bigger teams now have 3 DP’s AND they can now use this TAM fund for players who make more than $457k. The goal is to allow teams to have multiple mid-tier DP’s ($500-1M), while still allowing teams to splurge on very expensive DP’s like Giovinco, Bradley, Kaka, etc.
I still think it would have been better to just raise the salary cap more aggressively, but that’s not going to happen for another 5 years now.
Kudos for the Calvinball reference.
Step in the right direction (albeit a baby step).
With this increase how much money is allocated to each team for homegrown signings? Why can teams not spend however much they want on Homegrown signings?