clock menu more-arrow no yes mobile

Filed under:

Sounders just got nearly $2M of new money to spend on players

League injects $37 million into Targeted Allocation Money and Homegrown Player budgets

Joe Nicholson-USA TODAY Sports

Just as it was looking as though the Seattle Sounders' hands were going to be somewhat tied this offseason, now comes some potential relief. Major League Soccer announced on Wednesday an infusion of nearly $2 million of off-cap money to be spent over the next two seasons. Every team will get $800,000 of new Targeted Allocation Money as well as an additional $125,000 to be used on Homegrown Player signings in both 2016 and 2017.

This money comes on top of the $500,000 of TAM each team was given last summer and needed to be used by 2019. The Sounders used their TAM to sign Roman Torres and buy Osvaldo Alonso below the Designated Player threshold and open up a spot to sign Nelson Haedo Valdez.

While the money is not as flexible as general Allocation Money or a significant bump in the salary cap, this will allow teams to add players near the tops and bottoms of their rosters.

TAM can be used on players making more than the maximum salary-cap hit (currently about $457,000) but not more than $1 million (or $1.5M if they are midseason signings). The HGP money gives teams a significantly bigger pool from which to pay promising academy players without them hitting the salary cap.

As luck would have it, the Sounders could probably put both forms of money to good use.

After trading Lamar Neagle to D.C. United and allowing Chad Barrett to enter free agency, the Sounders are in significant need of another veteran scoring threat. Although it seems unlikely that the Sounders can use this influx of TAM to open up another Designated Player spot -- all three DPs currently make more than $1M -- they shouldn't have too much trouble finding players on the world market who fit that bill. The new TAM must be spent over the course of the next four transfer windows, but it can be spread out over several different players.

The boost in HGP money also makes it far more likely that the Sounders could sign someone like Jordan Morris for as much as $200,000 a year without having him count against the salary cap.

The flip side to this announcement is that the true middle of the roster will likely continue to be squeezed. Most, if not all, the new TAM is going to go to new players, and roster spots for MLS veterans are going to become increasingly tight. Those new players are also going to hit the salary cap at the high end -- even with the TAM -- and that could leave less money for players making in the low six-figures.

Still, this seems like a effective way to improve the quality of MLS rosters and hopefully the product on the field.

A few more notes about how this money will work, according to the league release:

  • 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 converted during the Secondary Transfer Window, the Designated Player may earn at maximum $1.5 million on a prorated basis. 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.
  • Clubs retain the flexibility to convert players bought down with Targeted Allocation Money into Designated Players if they have a free Designated Player slot.
  • Targeted Allocation Money and general Allocation Money may not be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.
  • A Player must earn more than $457,500 per year (2016 maximum budget charge) to qualify for Targeted Allocation Money. The compensation ceiling for such players is set at $1,000,000 per year, unless amounts are applied midseason to an existing Designated Player adjustment to Targeted Allocation. The minimum budget charge for a player compensated with Targeted Allocation Money is $150,000.

Sign up for the newsletter Sign up for the Sounder At Heart Weekly Roundup newsletter!

A twice weekly roundup of Seattle Sounders and OL Reign news from Sounder at Heart