Since its early days, MLS has designated its allocation process as the method by which teams can sign U.S. internationals when they either enter the league or return to it from overseas as well as obtain other high-profiled players.
Implementation and administration of the process, as in all player-distribution processes used by the single-entity league, has always been at the discretion of the league office.
The value of allocations, as well as guidelines for their distribution, has fluctuated over the years, with $250,000 to $300,000 the price for so-called major allocations and between $100,000 and $125,000 for minor allocations.
But since MLS adopted its Designated Player option in November, questions have arisen as to whether or not teams can use the DP slots to sign - and pay - American internationals coming home to a high salary, as could be the case this year with Claudio Reyna and Brian McBride, or whether those acquisitions - and the concurrent salaries - would be paid by MLS.
With the news that Real Madrid has pulled a new contract for David Beckham off the table, speculation is rife that Beckham has accepted an MLS deal and that it will be officially reported during the SuperDraft on Friday, which would certainly make its broadcasting partners ESPN and ABC happy. The draft is being televised live on ESPN2 at noon Eastern.
MLS has offered several proposals to Beckham during the last six months, according to a source, dangling millions of dollars for him to play, first off, but also guaranteeing him huge sums - as it has paid Carlos Valderrama since his retirement as a player - to serve as an ambassador and spokesman to the league.
Clearly, Beckham would not be affordable under the allocation process and is a DP all the way. Yet Reyna and McBride, who will be out of contract in June, could possibly be acquired for six figures - which a club could afford if it had amassed sufficient allocation money - but that leaves the thorny problem of how to pay them the $1 million-plus salaries they have earned in the EPL.
So, can a team can use the DP option to override a team seeking to acquire a player by the allocation process, which not only has stringent financial limits but a pecking order that lists teams by their priority?
The answer is yes. "The designated player option can be used on any player," says D.C. United president and CEO Kevin Payne, who sits on the league's competition committee. "It's up to the teams to decide if they want to go that route."
The league currently pays the salaries of all players, be they American or otherwise. Some earn more than the "maximum" salary, which has grown to more than $300, 000 per year. Eddie Johnson ($875,000), Landon Donovan ($900,000), Paco Palencia ($1.6 million) and Juan Pablo Garcia ($625,000) are just a few examples from last season.
Under the DP procedures, a team can pay whatever it takes to acquire a player and anything he earns above $400,000, which is the amount such a player counts against the per-team salary cap, which was $1.9 million last year and will be slightly less than $2.2 million in 2007.
The DP rules also mandate that players like Donovan and Johnson, currently being paid by the league, will be treated as DPs in 2008. Presumably, that would mean that the league could sign McBride and Reyna under the same terms, leaving teams the option of using their DP slots on other players, or saving those slots to utilize when they, like Donovan and Johnson, are reclassified as DPs in 2008.
In recent years, teams have been allowed to combine their allocation monies as well as split allocations into smaller portions, which was not permitted previously. However, teams are not permitted to use allocation money to pay DPs and must adhere to salary restrictions if they use the allocation process.
As to the question as why MLS would pay to get Reyna and McBride in January, rather than in June when they become free agents, the answer is: it depends.
Theoretically, a team can sign a free agent at any time, outside the transfer windows. But FIFA also mandates that a player who had been under contract to a club can only be signed outside a country's transfer window if he was released while that window was open. So a player released in June, when the European season ends, cannot immediately be registered to play in MLS, because the secondary window in the United States doesn't open until Aug. 15.
Not surprisingly, news came this week that Reyna and Manchester City were negotiating a transfer to MLS and McBride had reacted "coolly" to talk of another extension to his contract with Fulham, which extended his contract last year. Had Man City and Reyna been healthy, he would have stayed the entire season, but neither he nor the team has performed well. Fulham has been active in the player market, selling Luis Boa Morte and acquiring Clint Dempsey, and McBride's staunch work and steady goalscoring have earned the praise and respect of Manager Chris Coleman and the fans.
McBride grew up near Chicago and although the Crew, for which he quickly became the team's most popular player during his six MLS seasons, would like to have him back, he'll land close to home when he comes home, and the Fire would be willing to wait until the summer to get him.
The New York Red Bulls, on the other hand, need publicity and quality players now. It would be a gamble to use a DP on a 33-year-old prone to injuries doomed to play more than half his games on artificial turf, but the trade of Amado Guevara has left a huge hole in the Red Bull midfield. RBNY also has a second DP slot it acquired from Chivas USA in the Guevara deal.
(The Red Bulls could also trade him to Real Salt Lake so it could finally land Freddy Adu. Just kidding.)
As for the competitive aspects to signing Beckham, well, he's not dominant in his own right, but any coach as sharp as Frank Yallop must relish the prospect of him sending in crosses to Nate Jaquawhile Landon Donovan supplies, and feeds off, both of them. And the marketing dollars would be staggering.
And so begins the new dawn of MLS.