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NWSL announces major overhaul to compensation

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Higher cap, longer contracts, and allocation money, oh my!

Portland Thorns FC v Chicago Red Stars
Just call the new allocation system “The Kerr Rule”

The National Women’s Soccer League announced today some significant changes to compensation guidelines for the 2020 season and beyond. Key changes include a major boost to the salary cap, allocation money, longer player contracts, an elimination of the cap for housing and auto assistance, and permission to pay transfer fees.

The most immediate change is to the salary cap, which will rise to $650,000 for 2020, a boost of over 50% from 2019’s cap of $421,500. Concomitant with that is a raise in the minimum and maximum salary, to $20,000 and $50,000, respectively. As a comparison, NWSL’s inaugural season of 2013 had a salary cap of $200,000, with a minimum and maximum salary of $6,000 and $30,000.

Also new for next year is the option for teams to purchase up to $300,000 of allocation money for player contracts above the maximum salary. Although the league press release did not specify it, Equalizer Soccer reports that allocation money will be tradable within the league. These contracts will be limited to a subset of players, who cannot be U.S. or Canadian subsidized players, and who must meet at least one of the following criteria:

  • Best XI or Second XI in one of the two most recent seasons
  • Winner of an end-of-season NWSL award in one of the two most recent seasons
  • International player who has at least four caps for their national team in the past 24 months
  • Domestic player who has completed at least five seasons in NWSL
  • Players who were formerly subsidized by the U.S. or Canada but are no longer

For Reign FC, these criteria would cover a significant portion of the core of the team, including Jess Fishlock, Lauren Barnes, Bev Yanez, Rumi Utsugi, Lydia Williams, Steph Catley, and even Bethany Balcer thanks to her Rookie of the Year award.

In conjunction with these changes, the league has added more flexibility to contracts, which were formerly all for one year plus an option year. Teams can now sign players to one, two or three year guaranteed contracts, plus an option year if desired.

Another big change comes in terms of team-permitted assistance for housing and cars, which formerly had a maximum limit, which led to challenges for teams based in areas with a high cost-of-living. Such limits have now been removed entirely, enabling teams to offer year-round housing and an improved quality of life.

Finally, teams are now permitted to pay transfer fees to sign players from other leagues. These fees will be paid using allocation money and will not otherwise count against the salary cap, and there is no limit on the number of players a team can acquire by paying a transfer fee, other than the amount of allocation money they have available. Likewise, teams can now sell rights to players to teams outside of NWSL and retain a portion of the fee; in the past any fees connected with a player transfer went to the league.

Expect to see teams using these new mechanisms aggressively in the offseason. Of note, today is the deadline for teams to exercise 2019 options, offer new contracts, and waive current players.