Sounders significantly over estimated 2013 salary cap

Editor's note: I originally used the 2012 salary cap figure in my calculations. I've since fixed that. apologies. I'm also looking for clarification on the DP salary cap hit in 2013 (update: the DP cap hit is $367,000). - Jeremiah

When Adrian Hanauer said the Seattle Sounders were feeling the salary-cap crunch during his postseason press conference, there were definitely some skeptics. Their total team salary was only the eighth highest in the league, after all. How bad could it be?

Well, we decided to run the numbers and it appears the Sounders GM was giving it to us pretty straight. By Sounder at Heart's estimation, the Sounders are about $242,000 over the estimated 2013 salary cap (yes, we know it's technically the "salary budget" but we're going for simplicity here). (Editor's note: We have been informed that we drastically underestimated this figure. - J) We came to that figure after using the best information we have available (the players' union's listed salaries) and making some educated guesses (we assumed a 5 percent raise across the board, for instance). It's also important to note that this is the situation before any allocation dollars have been factored in, which we'll get into later.

Before we get too deep into the hows and whys, let's first make sure we understand the basics.

The CBA mandates an annual 5 percent raise in the salary cap. That means next year's cap should be right around $2.95 million, but that's a little deceiving. Almost every team's total salary will be well over that figure. Last year, for instance, the New England Revolution were the only team whose collective salaries were lower than the $2.67 million cap. If you add up every player on the roster, the Sounders were at least $1.4 million over the cap.

That's made possible by a few things. The biggest is that Designated Players have a fixed cap hit, so they only counted $350,000 against the cap for a full season and $175,000 if they join at midseason. I'm assuming the DP hit will go up about 5 percent this year, as that was how much they went up for 2012, bringing the total hit to $367,000 in 2013. Beyond that, only the top 18-20 earners on the roster count against the cap. Generation Adidas and HomeGrown Players are among the players who don't count against the cap. If teams are still over the cap, they can use allocation dollars to pay down their cap figure. Teams earn allocation from things like transfers, in trades with other teams, making CONCACAF Champions League or being really bad.

How did the Sounders get into this situation?

The Sounders were already right up against the cap at the end of last year, meaning the raise in the salary cap was basically eaten up by the mandated raises. In this sense, the Sounders' cap situation may actually be even worse as some of those raises are bound to be for more than 5 percent. We know Eddie Johnson's option for 2013 is a 50 percent raise, for instance, and we actually factored that in. (Editor's note: Again, we've been told a couple more players were in line for similar-level of raises. - J)

The other big culprit is Christian Tiffert hitting the cap at his full year rate, as opposed to his half-season rate. Right there, that's an additional $175,000 that the Sounders must account for. (Believe it or not, when the Sounders traded Alvaro Fernandez, his full $350,000 came off their books. So the move to replace Fernandez with Tiffert actually saved the Sounders $175,000 against the cap last year and basically facilitated the acquisition of Mario Martinez.) (Editor's note: We neglected to mention that Martinez has a loan fee that will more than double his cap hit. - J)

The final piece to the puzzle is that the Sounders have exhausted much of their allocation dollars. They should still have some from the Fernandez trade, as well as getting to the CCL quarterfinals, but the exact amount is unknown. This is also where missing out on the 2013-14 CCL hurts, as making the group stage actually nets teams more allocation dollars than advancing to the knockout stage does.

Here's our estimation of how the Sounders stack up against the salary cap today, without any allocation factored in (Editor's note: Turns out this was a very conservative estimate, although the best attempt with the information we had available. - J):

Are the Sounders totally screwed?

One thing is clear, the Sounders can't really afford to simply bring back the same team. If we assume the Sounders have about $250,000 left over in allocation dollars, that puts them right at the salary cap.

The biggest and seemingly most obvious player we can subtract from the Sounders' ledger is Jeff Parke, who's out of contract but likely in line to make close to $200,000 next year. Rumors are rampant that he's looking to move Back East. If the Sounders can work out a trade that nets them $75,000 in allocation dollars, that gives them a fair amount of wiggle room.

But removing the player Sounders head coach Sigi Schmid called their best defender is probably not a recipe for getting better. That means the Sounders are going to have to find a replacement, while also figuring out how to actually improve.

What are their options?

Trades are one obvious possibility. That's how Real Salt Lake is apparently deciding to deal with their similar situation, and have subtracted about $1 million in salary and picked up about $600,000 in allocation in one day of dramatic trading. In order to do that, though, they had to trade arguably their best defender, their second best scorer and one of their everyday midfielders.

For the Sounders, that would be the rough equivalent of trading Parke, Fredy Montero and Brad Evans. That would clear about $750,000 off the cap and probably net the Sounders close to that much in allocation. It would also leave them as a far worse team, albeit one with plenty of options.

The other possibility would be to sell off some players. Has Eddie Johnson revived his career enough to fetch $1 million transfer fee? Maybe. Is someone out there willing to pay $5 million for Osvaldo Alonso? Quite possibly. Any chance Newell's Old Boys would buy back Mauro Rosales? Seems at least plausible. Would the Sounders simply buy out one of their DPs? Stranger things have happened.

But I'll put it to you, what do you feel like are realistic moves the Sounders can make that would give them a chance to improve their roster? Do you feel like minimal change is still preferable? Can a fully healthy Steve Zakuani and a fully integrated Mario Martinez make up these losses? What are you hoping to see happen in the next couple months?