In a shocking announcement today, Major League Soccer brought forth a new category of money to be spent on players in the 2018 and 2019 seasons. Joining General Allocation Money (GAM) and Targeted Allocation Money (TAM) MLS has added a large pot of money available to each team called Discretionary Targeted Allocation Money (DTAM) – which will spend just like it’s older brother.

Currently, the league makes $1.2 million available to each to team with TAM. This new discretionary category would see that amount raised by $2.8 million dollars – but only if teams want to spend it. And the discretionary spending would be completely funded by the team and not the league.

The league has also announced that regular TAM can be pooled for 2018 and 2019. Meaning that if a team would like to get even more money, that the $1.2 million available in each year could be pooled together in 2018 [$1.2M (2018) TAM + $1.2M (2019) TAM + $2.8M DTAM (2018) = $5.2M (2018 Total TAM]. This, of course, would leave the club short of $1.2 million of TAM in the 2019 season.

Previously, the maximum contract a player could sign using TAM was less than $1 million. Under the new rules, that ceiling has been increased to $1.5 million. This means that any Designated Player that is making less than $1.5 million in Salary, on a prorated basis, could be “bought down” with TAM thereby opening up a coveted DP slot to sign another player whose contract could exceed the ceiling.

The rules in MLS are confusing. Giving teams the ability to spend their own money, as they do with Designated Players, is not something new but it’s also not completely common in a league that preaches parity and competitiveness.

For the Galaxy, this could open up many new possibilities for spending on a roster that currently has 17 open slots. Historically, TAM has been used on the INTL market to sign players like Jelle Van Damme or to pay down the salary of, then designated player Omar Gonzalez. It was also used in 2017 to pay a portion of the salaries of Jermaine Jones, and Gyasi Zardes.

But with Jones not currently on the roster and Zardes looking to be moved, the amount of 2018 TAM could be a real boon to a team that is looking to completely rebuild after a disastrous season last year.

Rumors currently point to Jörgen Skjelvik, a Norwegian center back, who could join the Galaxy in January. And according to Eurosport, the 26-year old would be the highest paid defender in the league – more than $900K in salary.

But under the new TAM rules, is $900k too much for a defender?

The pressure is on for the Galaxy. But for a team that is looking to add players to its roster and secure the services of three or four starters, this additional money might make the job just a bit easier. Add in the amounts of General Allocation Money – specifically from the Paul Arriola deal – and the Galaxy should be on the cutting edge of spending a lot of cash in the offseason.

But make no mistake, the Galaxy still have to be smart and calculating with how they put this roster together. Failure in 2018 is all too real after the disaster of the previous season.

ABOUT TARGETED ALLOCATION MONEY

  • The minimum salary budget hit for a player who is bought down with TAM is $150,000.
  • Discretionary TAM cannot be traded.
  • Targeted Allocation Money may be used to sign new or re-sign existing players whose salary and acquisition costs are more than the maximum salary budget charge but less than $1.5 million.
  • Clubs may use up to $200,000 of their currently available Targeted Allocation Money to sign new Homegrown Players to their first MLS contract, subject to League review and approval. Targeted Allocation Money cannot be used on a Homegrown Player previously signed to MLS.
  • Targeted Allocation Money may be used to convert a current 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 cannot 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.

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