New Rules

MLS announced on Friday the latest details related to the salary cap and roster budget rules for the 2018 and 2019 seasons.

Each MLS team will have $2.4M of targeted allocation money to spend on their rosters in 2018 and 2019 ($1.2M per year), which is an amount commensurate with 2017’s $1.2M TAM allotment. Additionally - and this is the big news - each team will now have the ability to spend an additional $2.8M per year in 2018 and 2019 in order to purchase an equivalent amount of “discretionary TAM.” All in, this is up to $4M a year in TAM.

The concept of discretionary TAM is not a surprise and was floated by Paul Tenorio and others earlier this season. But, the amounts here are somewhat astounding.

Check out the link above for all of the specific details, but notable is that the discretionary TAM cannot be traded between teams, and also that the maximum player salary to which TAM can be applied is now $1.5M (previously $1M). Players earning more than $1.5M must be tagged as designated players. The immediate impact as I see it is that many current DPs can now be bought down fairly easily to open up the DP spots for more expensive players. Players like Bedoya, Alonso, and Higuain could be TAM players next season instead of DPs if their teams are willing to sign new designated players in their place.

Possible macro effects on the league

I’m still digesting the knock-on impacts of this, but if we take the individual changes one at a time, maybe that would be helpful.

More targeted allocation money is now available (this increases the overall supply of league wages ... if teams decide to spend it) All targeted allocation money can now be applied to more expensive players - up to $1.5M in wages (this increases the overall supply of players eligible for TAM) The New discretionary allocation money is now an incremental cost to the individual clubs/owners (this means it will not automatically be spent the way normal TAM is. Owners will have to make decisions involving economic and competitive tradeoffs... much like they do today with designated players. This might lead to increased talent disparity between big spenders and smaller markets). The New discretionary allocation money cannot be traded, so if you purchase it, you’re using it either to reduce a budget charge of a player making more than $500K or to pay a transfer fee. That said, further analysis is required to understand the interaction between normal TAM and discretionary TAM. For instance, perhaps discretionary TAM “frees up” teams to think they can trade the normal TAM more freely (though I would advise against it).

What might this look like for an MLS team?

I worked through a couple extreme examples on twitter over the weekend, and that was just barely fun (another one in the replies):

Tried to think of most extreme MLS Senior Roster with new rules. Assumes $4M TAM, $300K GAM

3 U20 DPs at $150K budget charge each (think Barcos), 4 TAM players on $1.5M each, 1 player on $800K bought down with GAM, 1 player on $350K, and 12 players on the Senior Minimum of $67.5K — Tiotal Football (@TiotalFootball) December 9, 2017

But, let’s get slightly more relevant to close this out. What if we took the ATLUTD Senior Roster as it currently sits, made a couple of guesses at player signings to come, and maxed out the New Discretionary TAM rules? What would that look like?

A Rough Draft Prototype for a 2018 Atlanta United FC

Alright, first some assumptions:

$4M Nominal Cap, $4M in TAM is used completely and $300K in GAM used completely.

Atlanta loses no one in the expansion draft (even if they do, this doesn’t change much)

Guzan on an $800K annual salary (a guess, as 2017 released amounts were partial year)

Almiron is no longer a Young DP (turns 24 this year)

Escobar and Garza both on $275K (we won’t know the $s until the player union release)

Atlanta signs Ezequiel Barco on a U20 young DP deal ($150K against the cap) while buying down Villalba with TAM.

Almiron, Martinez, Barco, Guzan, Villalba, Carmona, McCann, Parkhurst, Escobar, LGP, Garza, Peterson, Kratz, Vazquez, Ambrose, Kann, Williams, and 3 additional signings make up the 20 man senior roster.

Having assumed the above items, including the still-very-much-not-finalized Barco thing, for illustrative purposes, Atlanta could utilize the new TAM rules to the following exciting pieces:

A $1M/yr defensive midfielder (including a $1M transfer fee) to replace Larentowicz (we’ll see if this post ages well) plus,

A $300K/year attacking midfielder on loan to replace Asad (sigh), and

A $175K/year MLS-caliber veteran depth centre back signing to replace...OK sure, Bobby Boswell.

This would round out the 20-man senior roster with potential upgrades wide left, in defensive midfield, and centre back and attacking midfield depth all the while complying with the new MLS Roster Rules. While I would hate to see Larry and Yamil go - two of my favorites - these sort of signings would lift my spirits some.

More Material

Lastly, Paul Tenorio did a Periscope shortly after the rules were announced, and he killed it. Check it out here.