MLS inner workings of transfers and loans - article

[S_D]

from sept 12 2008

some of it may be outdated but we never see much information on this so I thought it would be useful. An interview with RSL GM Garth Lagerway

http://keepinitrealsl.blogspot.com/2008/09/garth-lagerway-on-player-acquisitions.html

Some interesting points and also may explain some of the problems with bringing in Vitti and other South Americans.


In addition, last year the league gave extra allocation money to ALL teams for the first time. This was in addition to the annual “you suck allocations” traditionally given to all of the teams that do not make the playoffs.



In S. America, player ownership is a grey area. In US, and Europe teams own the player. In S. America the players ownership may be hard to decipher. In Brazil – the leagues are less clear. You need to spend a lot of time on the ground to get something done in Brazil. We can’t travel freely to Brazil without a visa. Players need a visa to come here even for a trial.



“Transfers from S. America are typically done with people not with clubs, because that’s who owns the rights. Because of this they are often done on loan. One of the issues that the league is going to address is that you can find and acquire good players particularly in Argentina, but often that is done on loan.”



“As you can imagine in a world governed by a hard salary cap if the buyout clause is half a million bucks, sure you might have the allocation money but all of that allocation cost counts against the cap and so you have to account for that. As you probably know the designated player counts for $415,000 against the cap, and you are only allowed one designated player per team. So now if you have a $500,000 acquisition cost, before you pay the player a dollar you are already into DP territory. So now you have to structure not only your cap, but the DP slot and any potential fee with the player.”


excuse the typo on the thread topic :)

[Plenty of Trout]

I didn't appreciate that the acquisition cost also hit the salary cap in addition to the actual player's salary.

That's highly restrictive.

No wonder transfers into MLS are rare.

[Oldtimer]

That's an excellent article and a good resource.

Most MLS GMs are not so forthcoming. For example, this is the first time I've read of an allocation to each team (clever... they end up effectively raising thr cap without letting on to the players that there is more money to grab).

[rocker]

i know Garber said he would be cutting off as much talk about league business as possible before they entered this negotiation period.

I didn't know about that allocation payout to all teams. So I'm trying to think -- other than "hiding" the finance details from the union, what's the purpose of that as opposed to taking that money and sticking it in the cap? maybe because it's moveable (tradeable) between teams while cap money isn't?

[Toronto Ruffrider]

That was an excellent article. It is now plain to see why we haven't been active in signing South American players. Acquiring Brazilian players is tough enough, but signing other South American players is no picnic either. It's no wonder why we got Vitti on loan.

I also found it interesting that RSL only has 6 international players at its disposal. Next to that number, Mo's got a stacked deck of cards to play with.

[S_D]

that's the only reason I can think of rocker. I think I will add this article to the trades thread so that as we come across this stuff we can get a better idea of how all of this works out.

[Pachuco]

I didn't appreciate that the acquisition cost also hit the salary cap in addition to the actual player's salary.

That's highly restrictive.

No wonder transfers into MLS are rare.

hmm...I though MLS never payed transfer fees. Which I would think is the same as acquisition costs. Maybe that's why?

[S_D]

MLS has paid transfer fees in the past, just on a few occasions though. I saw a thread on this in BS and I will try and dig it up.

[S_D]

http://usasoccer.blogspot.com/2006_08_01_archive.html

You will find the list near the bottom of the page dated August 02 2006

MLS Transfer Fees (Paid)


Fee Player From To Source
$4,000,000 Hernandez, LuisUANL Tigres Los Angeles link (http://www.socceramerica.com/article.asp?Art_ID=52830)
$2,000,000 Graziani, Ariel Morelia Dallas link (http://www.socceramerica.com/article.asp?Art_ID=54217)
$1,400,000 Etcheverry, MarcoColo Colo D.C. United link (http://www.soccertimes.com/langdon/1999/jul30.htm)
$1,000,000 Valderrama, Carlos Atletico Junior Tampa Bay link (http://www.socceramerica.com/article.asp?Art_ID=54217)
$800,000 Hong, Myung-BoPohang Steelers Los Angeles link (http://www.washtimes.com/sports/20040123-114358-1458r.htm)
$500,000 Nowak, Peter1860 Munich Chicago link (http://www.socceramerica.com/article.asp?Art_ID=54217)
$400,000 Toja, Juan Independiente Dallas link (http://www.socceramerica.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=27503)
$300,000 Comas, AlexAtletico National New York link (http://www.socceramerica.com/article.asp?Art_ID=52830)
$300,000 Conde, WilmanMillionaros Chicago link (http://www.soccerbyives.net/soccer_by_ives/2008/02/monday-mornin-1.html#more)
$250,000 Diallo, MamadouLillestrom Tampa Bay link (http://www.socceramerica.com/article.asp?Art_ID=52830)
$250,000 Galvan Rey, SergioOnce CaldasNew York link (http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXkxMzcmZmdi ZWw3Zjd2cWVlRUV5eTY1Mzk0MDUmeXJpcnk3ZjcxN2Y3dnFlZU VFeXk2)
$250,000 Gomes, RafaelSanta Clara Colorado link (http://www.soccerbyives.net/soccer_by_ives/2008/07/the-worst-mls-s/comments/page/2/)
$200,000 Moreno, JaimeMiddlesbrough D.C. United link (http://www.socceramerica.com/article.asp?Art_ID=54217)
$150,000 Corrales, RamiroSK BrannSan Jose link (http://www.socceramerica.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=25554)
$100,000 Borchers, NatOdd Grenland Real Salt Lake link (http://www.socceramerica.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=25559)
1.3 or 4.0 Donovan, LandonBayer LeverkusenLos Angeleslink (http://www.thefreelibrary.com/UNWELCOME+RETURN+EARTHQUAKES+FANS+STILL+UPSET+AT+G ALAXY%27S...-a0133539658)
high 6 figs Vega, MarceloSantiago New Yorklink (http://www.socceramerica.com/article.asp?Art_ID=54217)
high 6 figs Herrera, Marcelo Miami link (http://www.socceramerica.com/article.asp?Art_ID=54217)
high 6 figsLuiz, JoaoVasco da Gama New York link (http://www.socceramerica.com/article.asp?Art_ID=54217)
high 6 figsSanchez, Wellington Nacional New York link (http://www.socceramerica.com/article.asp?Art_ID=54217)

Notes

1) It's even harder to find stuff about the fees paid out, especially since most were from 1996-9. There's a lot of guys missing. There's a couple more I don't have exact numbers for. According to Soccer America (http://www.socceramerica.com/article.asp?Art_ID=54217), the fees for the following players were all in the high six figures:

Herrera, Marcelo
Joao, Luiz
Sanchez, Wellington
Vega, Marcelo

2) Sergio Galvan Rey's fee seems to be thrown around as $500,000. But according to Ives Galarcep on the link above, that number included the transfer fee and his salary that year. So I've estimated the transfer fee at half that.

3) Hong Myung-Bo's deal was mostly or all paid for by a sponsor.

4) If you know of any others, and you have the link to prove it, leave a comment.

EDIT: Also, any player on loan with an MLS team who later joins them for good should involve a transfer fee, since it's league policy to have an option to buy with a loan. For example, see Juan Toja.