It seems like every few months we hear about Major League Soccer releasing more Targeted Allocation Money, or TAM as we all affectionately call it. According to Grant Wahl, MLS is expected to increase it yet again next week following MLS Cup.
MLS will be increasing the overall TAM budget by $8.8 million. That’s an additional $400,000 for each team over 2016’s amount, which would bring the total to $1.2 million per team for the upcoming season.
TAM was first announced on July 8, 2015. Each team received $100,000 per year for the first five years (though in practice the entirety of the $500,000 was available up front), and they also received an $800,000 amount of TAM in 2016.
So what does this all mean for FC Dallas?
Off the bat it likely means guys like Mauro Diaz are likely going to see their contracts restructured against the salary cap. Clubs may use a portion of or all of the available Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down his salary budget charge to at or below the maximum salary budget charge.
Now if this happens, FCD has to immediately have a DP lined up to sign, per the rules of TAM. So if we free up a DP slot from Diaz, who will likely miss a large chunk of this season to an Achilles’ injury, they will have to make sure someone is ready to take that slot.
It also means we could see a guy like Anibal Chala, a defender that will likely be announced as the first big signing of the offseason, be brought in through TAM. FCD may use the funds to sign a new player provided his salary and acquisition costs are more than the maximum salary budget (that’s about $480,000 in 2017).
They could sell it too...
Clubs can trade TAM as much as they want and frequently do. Don’t be shocked if we see a lot of TAM get thrown around in trades over the next two months as we enter the draft heavy portion of the offseason.
- While this great news overall for the league to see more money poured into the roster slots after the DPs. I do worry that it hurts American players (something our old pal Bobby Warshaw is pretty vocal about on Twitter today).
- What we are seeing is MLS try to find ways around the salary cap. But it should be worth pointing out that its not a salary cap eliminator for teams. They’re only able to buy down so much on a DP-type salary against the cap. Some teams will be super clever about it, while others will likely continue to struggle with it.
- Did Matt Hedges’ new contract go through this? Doubtful, typically contracts like this will be worded in a way in a press release that you know TAM was used. But FCD also likes to be sneaky in this area too, so it isn’t totally out of the question. I just wouldn’t bet a lot on him making some max money that had to be bought down with TAM.