FanPost

Why MLS Needs to Stop Applying Transfer Fees to Salary Cap

As many of you know the MLS Players Union released the salary data for the 2011 season Saturday and there were a few surprises around the league.  The most surprising was how many clubs have been paying transfer fees to acquire new talent.  This is new for MLS and it shows that we are growing as a league.  Yes, there have been transfer fees paid in the past but it was unusual.  Most clubs waited until they could grab talent on free transfers. 

With the birth of the Designated Player Rule, it allowed clubs to go after talent that wouldn't fit into our small salary cap. . The league expanded the rule to allow clubs to acquire up to 3 Designated Players (DP's).  They hit the cap at 335k each.  This brought in big names such as David Beckham and Thierry Henry as well as allowed clubs to keep talent here such as Landon Donovan.  Now more teams than not have DP's on their roster and they have been used in many different ways to acquire new talent.

MLS applies all transfer fees and loan fees to the players salary for their cap hit.  The league also spreads these fees through out the length of the contract.  In reverse when a player is sold to another league that fee that is received is then returned partially to the club in the form of allocation dollars.  Allocation dollars are used to pay down the cap hit of salaries among other things.  As the recent salary data shows that a majority of the recent DP's have been bought for various sums that have totaled their cap hit into DP status.  The best example of this is Dallas DP Fabian Castillo.  We can see that he makes the league minimum 42k but is a DP because of the transfer fee.

If we as a league want to grow and produce a better product we need more talent.  As soccer is a global sport we are competing with larger leagues and they mostly do not have any salary restrictions.  I'm not petitioning for removal of the cap as we need to grow slowly and build a strong base.  I believe we can achieve this by changing the way MLS applies these fees.  If teams didn't have to use their DP tags on players like Sergio Koke (153k), Diego Chara (100k), Omar Bravo (120k) these clubs could go after the Beckhams and Henrys of the world.

I believe that the players who's salary demands are below the 335k DP thresh hold are not going to be demanding fees that will bankrupt the clubs and league.  It's time that we take off the training wheels and give the clubs more tools to improve the product on the field.  We can keep the cap to establish parity but this allows clubs who have off the field success (gate receipts, sponsorships, merchandising) to reinvest that capital into players.  It will be better for the league in the long run as the better the product the more likely that people will watch it.  If MLS can get more people watching the money will come in larger TV contracts.  They just need to have the vision to start the ball rolling by changing this rule.

FanPosts only represent the opinions of the poster, not of Sounder at Heart.

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