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MLS announces 'Targeted Allocation Money'

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We know clubs now have some more money to spend, so how will FCD use it?

Matthew Emmons-USA TODAY Sports

We've been discussing this 'Core Player' rule that Major League Soccer would be adding to the roster rules this summer for a couple weeks now. Today, the league finally rolled out what they are calling Targeted Allocation Money. Each MLS club will receive $100,000 per year for the next five years ($500,000 total) in additional funds to invest in their roster outside of the player salary budget.

These new funds are available to every MLS club today, which works out perfectly since the league's secondary transfer window just opened up.

Here are the details on the new allocation:

  • Similar to general Allocation Money, Targeted Allocation Money may be used to sign new or re-sign existing players. In addition, Targeted Allocation Money may be traded.
  • Unlike general Allocation Money, which may be used to sign players earning any amount, Targeted Allocation Money may only be used to sign or re-sign players who earn more than the maximum salary budget charge (but who are not Designated Players). In 2015, the maximum salary budget charge amount is $436,250.
  • Importantly, unlike Designated Players for which a club is responsible for any payments above the maximum salary budget charge, all clubs will be provided the same amount of Targeted Allocation Money through the League budget. As a result, all clubs will have the same opportunity to benefit from these new funds.
  • MLS clubs may bring forward a portion or all of their allotted Targeted Allocation Money, up to $500,000, to be used in a single season on up to three players at a time. For example, if a club wishes to sign a player at or above the maximum salary budget charge this season, that club may use up to $500,000 of their Targeted Allocation Money this year to acquire him.
  • Additionally, going forward clubs may use a portion or all of their allotted Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down, on a prorated basis, his salary budget charge to at or below the maximum salary budget charge. If Targeted Allocation Money is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.
  • Targeted Allocation Money and general Allocation Money may not be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.
  • While MLS clubs are not required to use their full $100,000 each season, they are required to use the remaining amount during the following year. For example, if a club does not use its $100,000 allotment in 2015, that club must use or trade at least that $100,000 of Targeted Allocation Money in 2016.

Get all of that? MLS is pretty much adding a couple million dollars to club rosters for flexibility reasons.

The quick glance at this is basically adding a fourth DP slot without actually calling it that. Being able to spend all of this money at once this year basically tells me that they are funding a DP slot here without calling it one.

So where will FC Dallas go with this additional funds? Until we know what the salary spread is for the club, we don't know whether or not they will need to use any of this money right now to buy down a player salary to help afford another on against the salary cap. Having only two Designated Players at the moment gives them some flexibility in this department where other clubs like LA and Toronto may need to use this to help free up a DP slot this summer.