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View Full Version : Allocation money equals Depth and Quality



BeachTory
03-15-2012, 02:37 PM
After last night's remarkable performance, I was wondering about how we would cope with immediate fixture congestion. I have been researching allocation money in light of the LA Galaxy signings and how they were going to get all those contracts under the salary cap. Since allocation money is essentially funds that were earned by the league with some level of attribution to a specific club there is a specific allocation allotment to MLS teams as they advance in the CCL tournament. More allocation money on top of the allocation money we were granted for missing the playoffs last year does provide us with an opportunity to buy depth and quality in our roster.

I was doing this research trying to nail down rumours of significant increases in allocation money being available by the league and being paid quietly to maintain the impression of the salary cap. It benefits MLS to maintain the illusion of a specific salary because they are the ones who are negotiating the contracts with the agents and the players but the league generally and many of the teams individually like TFC have increasing revenues and a desire to get better quality at a modest price. The specific example here is the recent relatively large local cable contract signed by the LA galaxy which of course earned the league a significant amount of money which in turn could have created significant allocation room for the LA galaxy. TFC stand to benefit in a similar way with our new Rogers/Bell overlords looking to lock up exclusive content for their broadcasting assets.

By the way, has anyone ever calculated the average gate at BMO field? I could get a very accurate number for a league sellout game since the prices per section are available but I don't have the specific number of seats that correspond with the price categories. The CCL tourney rules specify splitting the gates between the visiting teams and I'm sure that the specific game gate is very relevant but I am working specifically on the incremental television money especially the incremental CCL broadcast revenue from Canada.

There is no doubt that MLSE are adding to profitability with this CCL run but how much of it can be funneled back into the team under the MLS rules is kind of where I'm interested. It is also nice to know that the teams international reputation will have grown from recent success making it easier to recruit and retain.

Yohan
03-15-2012, 02:49 PM
there are specific ways allocation money is earned. getting a high gate sales or tv contract isn't one of them

BeachTory
03-15-2012, 03:26 PM
Gate means club money, not shared except by the specifics of the gate share agreement. does not generate allocation. Those profits go to the only place TFC can acquire/buy depth and quality over time - the academy.
TV Contract is split with league. That split is exactly what I am researching vis the significant increases in allocations.

This is on the MLS web site:

Allocation Money
Allocation money is a resource available to clubs in addition to their respective salary budgets. A club may receive allocation money for:


failure to qualify for the MLS Cup Playoffs;
the transfer of a player to a club outside of MLS for value;
expansion status;
qualification for the CONCACAF Champions League;
trading in up to two Off-Budget roster spots;
funds from purchased third designated player roster spots.

Each year the MLS Competition Committee determines the allocation amount to be made available to each club. Allocation money can be traded by clubs. Allocation money does not count against a club’s salary budget and can be used:


To sign players new to MLS (that is, a player who did not play in MLS during the previous season).
To re-sign an existing MLS player, subject to League approval.
To “buy-down” a player’s salary budget charge below the League maximum of $350,000.
In connection with the exercise of an option to purchase a player’s rights or the extension of a player’s contract for the second year provided the player was new to MLS in the immediately prior year.

NOTE: To protect the interests of MLS and its clubs during discussions with prospective players or clubs in other leagues, amounts of allocation money held by each club will not be shared publicly.



Note for example point 2. This no longer says sale but transfer, meaning the loans that the Galaxy did for example in Jan/Feb which brought in cash to the league (offsetting the salary costs of Donovan and Keane) are available to create allocation.

The point is the amount is generally arbitrary. The league decides if the league benefited from foreign tours of MLS teams. The league decides if their split on local TV contracts can be dispersed league wide.

A $55M deal (ten years) should encourage the league to allow the host team a mechanism to improve quality and depth.
http://articles.latimes.com/2011/nov/15/sports/la-sp-galaxy-tv-20111116

Would TFC not be in line to do the same thing being in an above average media market?

Yohan
03-15-2012, 03:29 PM
Gate means club money, not shared except by the specifics of the gate share agreement. does not generate allocation. Those profits go to the only place TFC can acquire/buy depth and quality over time - the academy.
TV Contract is split with league. That split is exactly what I am researching vis the significant increases in allocations.

This is on the MLS web site:

Allocation Money
Allocation money is a resource available to clubs in addition to their respective salary budgets. A club may receive allocation money for:


failure to qualify for the MLS Cup Playoffs;
the transfer of a player to a club outside of MLS for value;
expansion status;
qualification for the CONCACAF Champions League;
trading in up to two Off-Budget roster spots;
funds from purchased third designated player roster spots.

Each year the MLS Competition Committee determines the allocation amount to be made available to each club. Allocation money can be traded by clubs. Allocation money does not count against a club’s salary budget and can be used:


To sign players new to MLS (that is, a player who did not play in MLS during the previous season).
To re-sign an existing MLS player, subject to League approval.
To “buy-down” a player’s salary budget charge below the League maximum of $350,000.
In connection with the exercise of an option to purchase a player’s rights or the extension of a player’s contract for the second year provided the player was new to MLS in the immediately prior year.

NOTE: To protect the interests of MLS and its clubs during discussions with prospective players or clubs in other leagues, amounts of allocation money held by each club will not be shared publicly.



Note for example point 2. This no longer says sale but transfer, meaning the loans that the Galaxy did for example in Jan/Feb which brought in cash to the league (offsetting the salary costs of Donovan and Keane) are available to create allocation.

The point is the amount is generally arbitrary. The league decides if the league benefited from foreign tours of MLS teams. The league decides if their split on local TV contracts can be dispersed league wide.

A $55M deal (ten years) should encourage the league to allow the host team a mechanism to improve quality and depth.
http://articles.latimes.com/2011/nov/15/sports/la-sp-galaxy-tv-20111116

Would TFC not be in line to do the same thing being in an above average media market?
i'm now confused. so exactly what are you trying to say? the league somehow gives more money to teams that brings in more money other than listed mechanism for getting allocation?

BeachTory
03-15-2012, 05:45 PM
Yes, they do. The teams that are adding significantly to the league are getting more allocation.

Also, the league has a lot more general revenue to work so all the teams are getting more allocation that they can use to fit under the salary cap or trade. This bigger pool of allocation makes it easier to acquire allocation. Explains Le Toux

ryan
03-15-2012, 08:53 PM
Interesting find if accurate.

Oldtimer
03-15-2012, 08:56 PM
I'm sorry but I think you're wrong, it goes totally against parity. It also doesn't match what analysts or the league itself has told us how they operate. The official list you copied included nothing about allocation for TV rights.

You are also saying that teams that add to the league are getting more allocation. But since allocation amounts are secret, unless you have access to a wkileaks of mls, there is no way you could possibly know that.

If you mean that teams that get into the CCL get more allocation, yes we knew that. But it has nothing to do with revenues.

__wowza
03-16-2012, 08:32 AM
^ i see both points, and ive explained this before:

allocation money is given to teams who provide more exposure to the league, teams that win. teams that win the league and win CONCACAF spots. this is done, not to dispel parity, but to allow the winners a certain edge. "you won the league, here's a bit of extra money to sign players who want to play for a winning team but require a bit of an extra nudge".

parity in restored in all of this by allowing teams who don't win to get higher draft picks and top spots in the re-entry draft. instead of giving them a one stop shot at improving their team to keep up the winning mentality, teams that don't do so well are given all of the tools available in the league to build, and build younger. young stud players that'll be with them in the long run or allow them to pull in big returns despite previously tanking the season, omar gonzalez, george john, etc. these players were drafted to teams that tanked.


one is a quick added boost, one is a long run fix.
parity restored.