It sounds like Targeted Allocation Money (TAM) will get a significant increase for the 2017 MLS season. According to Grant Wahl, MLS is expected to make the announcement sometime in the next week.
If Wahl’s report is correct, MLS will be increasing the League’s overall TAM budget by $8.8 million. That’s an additional $400,000 for each team over 2016’s amount, which would bring the total to $1.2 million per team for the upcoming season. With the MLS salary cap scheduled to increase to $3.845 million in 2017, this one-time additional $1.2 million can help many teams bring in better talent to improve their rosters or give them another tool to keep some of their higher-priced players.
TAM was first announced on July 8, 2015. Each team received $100,000 per year for the first five years (though in practice the entirety of the $500,000 was available up front), and they also received an $800,000 injection of TAM in 2016. Based on the way teams are allowed to spend the money it’s entirely possible the Sounders have already spent their all their pre-2017 funds or have plans for it. The new injection, then, has the potential to be a pretty big boost for the team.
There are only four ways that TAM may be used. They are as follows:
- Clubs may use the funds to sign a new player provided his salary and acquisition costs are more than the maximum salary budget (that’s about $480,000 in 2017).
- Clubs may re-sign an existing player provided he is earning more than the maximum salary budget.
- Clubs may use a portion of or all of the available Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down his salary budget charge to at or below the maximum salary budget charge. If Targeted Allocation Money is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.
- A club retains the flexibility to convert a player bought down with Targeted Allocation Money into a Designated Player if that club has a free Designated Player slot.
Clubs may trade their Targeted Allocation Money to another club, and indeed this has been a popular way of greasing the wheels for various deals.
The Sounders have used TAM in the past to buy down Osvaldo Alonso’s Designated Player contract to make him a non-Designated Player and eventually led to Nelson Valdez joining the club during the Summer of 2015. Román Torres was able to join Seattle five days after Valdez with TAM.
The Sounders could use some of the TAM heading into the 2017 season on some players in order to re-sign them, as in the past, or they could trade portion(s) of their TAM to other clubs in order to move up in the various player acquisition systems in place, like the allocation rankings.