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As first rumored last month, MLS announced today an increase in the amount of Targeted Allocation Money (TAM) that each team has available. Similar to 2017, teams will have $1.2M in TAM available annually for the 2018 and 2019 seasons, funded by the league. In addition to this, each team can now spend an additional $2.8M in TAM annually, which the team is responsible for funding themselves. The additional TAM is also available in both 2018 and 2019. If that wasn’t enough, the maximum salary for a player eligible for TAM has increased to $1.5M. Finally, a team can pull forward part or all of the $1.2M of TAM for 2019 and spend it in 2018.
MLS will have a salary budget of $4.035M in 2018. If a team were to spend all $4M of their TAM on 11 players and buy each one down to the minimum salary budget charge of $150K, they could still have 3 designated players and be left with nearly $218K to spend on each of the final four senior roster slots. This is probably an unrealistic scenario, as all 11 TAM players would need to have salaries of exactly the maximum budget charge, but it does illustrate just how much money a team can now spend on talent.
If you were wondering just how the Sounders were going to fit in Kelvin Leerdam, Roman Torres, Ozzie Alonso, Victor Rodriguez, Nicolas Lodeiro, Clint Dempsey, and a new DP; you just received your answer.
This isn’t without downsides, of course. Given that the extra TAM is team funded, there are going to be teams that don’t use their TAM. You might also run into the circumstance of it making more sense to give a player $500K+ versus signing him for $400K, because being over the TAM threshold gives you much more budget flexibility. Overall though, this is a huge step forward for the league and it has to have Garth Lagerwey salivating.