There could be some significant changes coming to the way Designated Players are used after the 2019 season. According to MLSsoccer.com’s Sam Stejskal, the league is floating the idea of eliminating the third Designated Player spot or putting a hard cap on it, possibly as low as $1.5 million. The changes would likely coincide with the new CBA and start in the 2020 season, and would be accompanied by an increase in Targeted Allocation Money spending.
I've been told by multiple sources that MLS is discussing either eliminating the third Designated Player or putting a cap on how much teams can spend on the third DP. If either change is put in place, MLS would almost certainly add more TAM.— Sam Stejskal (@samstejskal) September 21, 2018
Why? Details in my latest video. pic.twitter.com/sLCxnsCf7G
The thinking behind the move is reasonably straightforward: MLS is looking for ways to increase the overall quality of the league without necessarily spending a ton more money. Still, this would likely result in an overall increase in spending as it would almost certainly be paired with a significantly increased salary cap (in the last CBA it started with a 12.5 percent increase and then went up 5 percent in each of the next four years) as well as an infusion of more TAM (teams can currently spend up to $4 million of TAM per year).
Even among the cheapest teams in the league, the salary floor was nearly $6 million and most teams were spending at least $8 million, according to salary data released before the close of the summer transfer window. Notably, only Toronto FC and LA Galaxy were spending more than $1.5 million on three different players. Although it was not immediately clear if transfer fees would count toward the third-DP spending limit, the only other teams with three players hitting the cap at more than $1.5 million including fees were Atlanta United and LAFC. It’s possible the summer transfer window spending may have increased these numbers slightly, but a cursory look suggests no more than four teams would be immediately affected by this change.
A change such as this would likely be a boon for a team like the Sounders, who have shown a willingness to max out their TAM spending instead of breaking the bank on three massively paid DPs. The current roster, for example, has only two players — Nicolas Lodeiro and Raúl Ruidíaz — earning more than $1.5 million.
Independently of Stejskal’s report, I’ve also heard rumors that MLS won’t be approving any new contracts that would give a team three DPs making more than $1.5-$2 million a year beyond 2019, likely in anticipation of this move. That could help explain why the Sounders were so interested in signing someone like Paolo Hurtado this summer, as he would have been hitting the cap somewhere in that range. It should also serve to set expectations about what kind of DP the Sounders will be pursuing next year, although it’s notable that they shouldn’t have to worry about transfer fee implications for someone signed in 2019.