Sign up for our COVID-19 newsletter to stay up-to-date on the latest coronavirus news throughout New York City

Discretionary Targeted Allocation Money (TAM) is a relatively new initiative by MLS, one that looks poised for a change to its implementation in the not too distant future.

Metro has learned that players signed via Discretionary TAM can now be traded, a move that MLS could announce this week, a source close to the situation says. Up until now, players signed via Discretionary TAM could not be traded for consideration within the league but the league is set to overhaul those limitations.

Up until now, a player signed with Discretionary TAM could be traded but not for consideration. In other words, a Discretionary TAM signing could be traded as a salary dump but nothing could be received in return. Now, the source said the league is close to announcing that Discretionary TAM signings can be traded for compensation.

As a new rule for adding players to a roster, Discretionary TAM is an additional $2.8 million per year that teams can apply to their roster outside the salary cap. This is outside of the restrictions in place for signings such as Designated Players and regular TAM, general allocation money and other such nuances to the league’s salary cap.

The introduction of Discretionary TAM this offseason was a shrewd move by MLS, allowing teams that wish to spend more to build a roster the flexibility under the salary cap to do so. This is important as the league looks to continue to grow and add more players in their prime from South America and Europe as well as keeping domestic players in MLS.

Players signed via the Discretionary TAM mechanism were unable to be traded within MLS up until now. The source tells Metro that “Discretionary TAM signings can [now] be traded following the second window after their signing.” It is a slight tweak but gives teams greater flexibility with how to construct their rosters.

This could open the door for more movement within the league, especially as teams look to upgrade their rosters this summer.

It also could prove a boon as MLS pushes for greater international success.

That teams involved in competitions such as the CONCACAF Champions League can now make a move for eligible players signed via Discretionary TAM should help stack teams ahead of this competition. MLS made great strides this offseason with two sides making the semifinals of the CONCACAF Champions League. Toronto FC lost in the finals to Chivas de Guadalajara on penalty kicks.