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Two thumbs up for two, or three, DPs per team
by Ridge Mahoney, April 1st, 2010 8:20PM
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TAGS:  mls, soccer business

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MLS might have kept it simple by simply increasing the number of Designated Players each team can sign from one to two, and also allowing a team the option of using a third DP slot if it so wishes.

This is what the league has done, sort of. It has also opened up the cash box far enough that a team could field three Designated Players at a quite unobtrusive salary-budget charge, to use its terms, of just $450,000. I’d be tempted to point out that number is only about 18 percent of a team’s salary cap this year ($2.55 million per team) but that would be misleading.

Why? Because teams can use allocation money to “buy down” the salary-cap hit, to use common usage rather than the league’s term, of DPs. Last year, the first DP on a team counted $415,000 towards the per-team cap of $2.31 million; now, all DPs count the same against the cap -- $335,000 – and allocation money can be used to knock that number down to $150,000 per DP. A DP signed in midseason counts one-half of the regular hit -- $167,500 – and this procedure follows that of past seasons, when Cuauhtemoc Blanco and Denilson came to MLS during the summer.

To review, allocation money refers to “funds, separate from the club salary budgets, provided by the League based upon finish in the previous season, fees collected for the transfer of a player abroad, expansion or exceptional circumstances.” As the 2010 expansion team, Philadelphia has been provided with more than $1 million of allocation money, which it has used in trades and other transactions.

A third DP also costs the team a $250,000 penalty, which – and this is where the league has reverted to its often-byzantine ways – is spread among the teams not employing three DPs. That won’t amount to much per team; more likely than not only a few teams will sign up three such players, but it does levy an additional cost on the big spenders.

DP slots can no longer be traded, so a team that already has two DPs doesn’t have to jump through any hoops – other than the financial ones – such as a trade to tack on a third. As long as it’s willing to pay the freight, it can load up the train. No team will be permitted four DPs under any circumstances, at least not yet. Another change is DP slots no longer expire after a stipulated period of time.

Since the majority of teams have yet to sign even one DP, why has the league gone hog-wild, relatively speaking, to jack up the ante? One can suppose it allows said big spenders to splash out their own cash, as for DPs it is the team – not the league, which otherwise pays all salary costs – that must pony up. I suspect those costs cannot be passed onto other teams as are other losses that are spread amongst the MLS partners.

But I think this can indirectly increase pressure on notoriously frugal teams to sign up at least one DP, both to silence strident criticisms from fans and media pundits and to give ambitious coaches one method to remain competitive. If Toronto, Seattle, Los Angeles, Chicago and New York start beefing up on DPs and climb up the standings, pressure increases on teams bereft of said players to keep pace.

Rather than jeopardize the legal standing of its single-entity structure by allowing free agency to creep into MLS, the league has instead given the teams more license to bid aggressively for talent. A team need not acquire a new player to join the DP Club; players currently under contract can be "elevated" to DP status, as the Crew did with Guillermo Barros Schelotto (before bumping him back down after one DP season) and D.C. United did with Luciano Emilio.

This mechanism also gives teams, and the league, another way to keep good players who otherwise might leave. Since a team can use allocation money to acquire new players or re-sign players already on its roster, it can upgrade a player to a DP and also soften its cap hit with allocation money. However, a team is not obligated to use allocation money for its DPs. It can sign three at the full salary-budget charge of $335,000 each if it has the cap room, and deep pockets, to do so.

Since its inception, MLS has worked in mysterious ways. Ingraining the use of allocation money – the exact figures of which are never officially acknowledged – deeper into its player acquisition processes gives it a murkier look amid persistent skepticism that not all teams are treated equal.

But for ambitious organizations willing to spend, this is their methodology to do so. It's a counterpoint to parity dictated by competitive strategies and financial limits. Let’s see how it shakes out.



0 comments
  1. Anthony Pignataro
    commented on: July 15, 2010 at 7:42 p.m.
    I still think we have to start allocating DP money for American players with caps. That way we keep American players in MLS and the fans start to associate the National Team with MLS. In other words, call it DAP and each team MUST have a DAP, which is a Designated American Player with caps. This will allow the crossover popularity that MLS hopes to gain with the success of the mens National Team

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