Major League Soccer announced that $37 million will be divided among all 20 teams for new and current players over the next two years. This money has special rules tied behind it and is known as Targeted Allocation Money (or TAM).
What exactly is Targeted Allocation Money? To explain this as simply as possible, it is money that will be used, in MLS’ words, to provide “clubs the opportunity to sign more impact players in the middle of the roster and add young Homegrown talent.” Essentially, this money is for players who may not be worth the multi millions of a Designated Player but worth way more than the vast majority of MLS players at the $60k to $450k range.
To get a bit more specific, each team will receive $800k in Target Allocation Money as well as $125k in Homegrown Player money, to sign young developmental talent, in both 2016 and 2017. This is in addition to $500k in Targeted Allocation Money received at the beginning of this season and must be used by 2017.
Targeted Allocation Money is great for MLS because it’s going to require MLS teams to spend money. Where regular Allocation Money (MLS’ version of a salary cap) is optional and can be kept, there is no advantage to MLS teams keeping Targeted Allocation Money. In addition, TAM can only be used for players who earn between $457k and $1 million. This means all 20 teams will be required to sign starting level players with their $1.6 million and thus will strengthen the MLS talent pool.
This is the next step for MLS to be a stronger league. Before TAM, you were either a Designated Player or you weren’t. Each team was limited to only having three Designated Players (for a maximum of 60 league wide) who could make a theoretically unrestricted amount of money and anyone who wasn’t, didn’t make over $450k a year. That kind of restriction could cause a player to leave for another league for more money and MLS would lose some talented players simply due to salary restrictions. TAM will give teams some breathing room to keep talented players and not be compelled to make them Designated Players, with which there are a limited amount of available slots.
If this rule still sounds insanely complicated, you are not alone. Some MLS rules seem to be so complicated that a Law degree is required to understand the complexities of the MLS rulebook. While I love the TAM rule, I think rules like this and others really make it difficult for average fans to understand the rules and maybe get turned off on the entire concept of the rule, even if it’s beneficial for MLS. I’m not saying every rule needs to be incredibly simplified, but if I feel like I need 5,000 words to fully explain the MLS salary rules, it’s too complicated.
Either way, whether you understand this new rule or not, it is a good sign of progress for MLS and the players. In terms of salary, MLS still pays most players less than other top leagues around the world. This will be a step in the right direction.