The NWSL announced the league’s 2024 competition guidelines on Thursday, highlighted by a significant boost in the salary cap and the phasing out of allocation money, along with a series of rules related to transfers.
The league salary cap for the 2024 season will be $2,750,000 per team, up nearly 40% from a cap of $1,375,000 plus $600,000 in allocation money available to each team in 2023. Relatedly, teams can no longer purchase new allocation money and must use any remaining funds by the end of 2026. As recently as 2019, the salary cap was less than $500,000.
With the end of allocation money, which was previously the only way for teams to pay incoming transfer fees and which facilitated most trades within the league, a new “net transfer fee” system has been established where each team can have a net expenditure of up to $500,000 per year on trades and transfers before they are charged a 25% luxury tax against their salary cap. This means their expenditures for acquiring players and assets can be up to $500k above the amount of money they receive for outgoing transfers and trades before they are penalized.
Additionally, the league doubled the number of U-18 players a club can have rostered, now allowing four per team, and they tightened rules regarding loans and transfers between clubs which have shared ownership. The latter change limits the number of loans between related teams per season, sets a minimum one-year duration for those loans, and establishes rules regarding how loanee salaries count toward the NWSL salary cap and whether transfer fees between the two clubs count toward the NWSL team’s net expenditure limit. Currently the Washington Spirit share ownership with Olympique Lyonnais and the London City Lionesses, while the Utah Royals share ownership with Brøndby IF in Denmark.