MLS Salary Rules Question

[MartinUtd]

Okay I have a quick one here:

Why would a team pay for a players raise beyond the individual cap with allocation money when they could use an unused DP spot and take a smaller cap hit?

[menefreghista]

Allocation is paid by the league.

Any money above the cap hit on a DP contract is paid by the team.

[Pookie]

Plus the max cap hit for any player, DP or not is $335k.

[MartinUtd]

Ohhhh that makes sense. I've had allocation wrong this whole time. I thought it was like the DP rule but for the team's budget as a whole.

Thanks for the clarification!

[Kooper]

Also if you had the chance and cap space to sign two players, one at 500K and the other at 2 million. It would make sense to pay the first 500K over and above the DP amount leaving you free to save the DP spot for the 2 million dollar player.

[MartinUtd]

Also if you had the chance and cap space to sign two players, one at 500K and the other at 2 million. It would make sense to pay the first 500K over and above the DP amount leaving you free to save the DP spot for the 2 million dollar player.

That made sense previously, but since the 3 DP's rule I couldn't grasp why allocation was still so important. Since the league is on the hook for the expenditures it explains why it's still so important.

[babone]

So how do you get allocation money?

[Kooper]

That made sense previously, but since the 3 DP's rule I couldn't grasp why allocation was still so important. Since the league is on the hook for the expenditures it explains why it's still so important.

But if you wanted to pay a third player 500K you either have to pay the full 500K or pay 335K plus 250K as a luxury tax. It would still be cheaper to pay the guy 500K. But really I doubt this would ever happen.

[Yohan]

So how do you get allocation money?

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;

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 $335,000.
• 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. (Similarly, most clubs in other countries do not announce the amount of money they plan to spend during a given transfer window.)


http://www.mlssoccer.com/2011-mls-roster-rules

[babone]

It's to there was not some kind of allocation tied to season tickets or % of capacity on attendance. That would give clubs with a strong following a litttle more of a deserved edge.

[Oldtimer]

It's to there was not some kind of allocation tied to season tickets or % of capacity on attendance. That would give clubs with a strong following a litttle more of a deserved edge.

Like most N. American leagues, you get rewarded for sucking. However, the bonus for making the CCL is a very important exception. MLS wants their teams to do well... and RSL is now doing so.

[Pookie]

It is interesting to see that the league removed reference to allocation money being made available for "exceptional circumstances as deemed appropriate by the competition committee".

This would be what allowed NYRB to get Henry and Marquez. It's not like they saved up and went on a spending spree. Similiarly, when Beckham goes, LA doesn't get to keep the 5M per season.

Great setup when the amounts are never made public, eh?

[Fort York Redcoat]

Like most N. American leagues, you get rewarded for sucking.

Oh parity's a part of we..

I know, I know. We still need it.

[Oldtimer]

It is interesting to see that the league removed reference to allocation money being made available for "exceptional circumstances as deemed appropriate by the competition committee".

This would be what allowed NYRB to get Henry and Marquez. It's not like they saved up and went on a spending spree. Similiarly, when Beckham goes, LA doesn't get to keep the 5M per season.

Maybe the other clubs finally got fed up enough that NY and LA are always "exceptions to the rule," and despite their being the 2 most important markets had their representatives on the Board of Governors vote away that discretion for the competition committee.

[Pookie]

^ I'm sure the ability to dish out $5M per year still exists. I think they've just covered under the statement "Each year the MLS Competition Committee determines the allocation amount to be made available to each club."

There is still plenty of wiggle room within that definition to make things happen.

That said, I made a mistake above. Allocation money wasn't necessarily used to buy Beckham (or Henry or Marquez). Allocation money could be used to buy down the cap hit of Beckham (or Henry or Marquez) in order to squeeze the players under the cap.

Of course, the league helps in other ways such as the Barcelona $0 transfer fee to NYRB. For any other team, including other MLS teams, the fee was $5M.

[rocker]

Henry and Marquez woulda fit in OK last season on the cap since both guys arrived halfway through. that's about 167K each for 2010.