What will new and Improved TAM mean for MLS?

By Ridge Mahoney

Something about the number four must be messing with the MLS masterminds as they ponder other ways to permit teams to spend more money on players.

Either that or they just love their newest acronym, TAM, which burst onto the scene earlier this year to great fanfare and, gasp, actual numbers provided!

This is the league, remember, which doesn’t formally publish season-ticket information but trumpets percentage increases of same, and secretly passes out and keeps tabs of allocation money, not to be confused with Targeted Allocation Money (TAM), without revealing details of amounts supplied.

Only gradually, for example, did word leak out a few years ago that the team with the worst regular-season record gets more allocation money than the other teams that miss the playoffs. Or at least that’s how it used to work. For 2015, is Chicago indeed lowest on the allocation-money totem pole and thus the one to receive the most, or one of eight stragglers to be allotted the same sum? We don’t know.

But we do know that initially each team was given $500,000 in TAM to add another Designated Player. Jumping directly from three Designated Players to four, which the league has already sort of done, is apparently too much for MLS to justify as it also plays down lucrative increases in attendances, sponsorship, TV revenues, etc. Otherwise, there’d be no need to tease out possible tweaks to the use of TAM, which last summer emerged as a way for teams to add an additional Designated Player using such funds to buy down the contract of said player or one already on the books.

Quite conveniently that sum of $500,000 proved just enough for the Galaxy to buy down the contract of Omar Gonzalez, the lowest-paid Galaxy DP at a base salary of something less than the $1.4 million listed for 2015 in the MLS Players’ Union documents. Using TAM, his salary was lowered below the $436,750 threshold, but only for the 2015 season. So it needs to either move a DP or acquire enough normal allocation money -- either in trades or by selling a player -- to buy down Gonzalez’s contract, again.

But look! The Board of Governors is meeting Saturday to consider new, improved -- and presumably extra-strength -- TAM by which the Galaxy, and a few other teams, can continue the process. With a greater amount of TAM, a team can buy down a larger contract than it could with only a measly $500,000 (which is actually $100,000 per year over five years, but not really, since it can be used all at once, if that makes any sense).

Going to four DPs would seem an easier solution, especially since the majority of DP salaries are closer to the DP threshold than they are to the multi-million-dollar contracts signed by Clint Dempsey, Obafemi Martins, Michael Bradley, Sebastian Giovinco, et al. Portland had no problem signing Lucas Melano as a fourth DP, since it had enough TAM to buy down the relatively modest contract of Fanendo Adi ($651,000 base salary).

But in a convoluted way, the league is restricting teams -- somewhat -- by implementing TAM. A team must use either TAM or regular allocation money to buy down the contract of a player if it wishes, in effect, to field a DP without him being classified as such. At the present time, teams are not allowed to blend TAM and regular allocation money on the same contract.

While the non-playoff teams and CCL qualifiers will receive an infusion of allocation money for the 2016 season, there won’t be nearly as much fresh allocation money floating around as there was for the 2015 season, when expansion teams -- which also get a big pot of spending cash when they enter the league -- New York City FC and Orlando City SC did a lot of deals involving allocation money.

So perhaps TAM is a way to tide over higher-spending teams until another expansion boom triggers a wave of that other form of allocation money. But doesn't that stick a fork in the league's mantra of parity?

One justification the league can use for TAM is giving teams an alternative that otherwise would be forced to trade players for normal allocation money or sell them abroad, for which they receive a cut of the transfer price (between 67 and 75 percent). It’s also a resource teams can budget for the future if the numbers and necessities of a fourth DP make sense. (They could also just call it the Omar Rule but that wouldn't be fair.) So, no surprise, TAM is here to stay and probably destined to further re-shape the MLS landscape.

The frustration level for fans of teams with one or two DPs, and lower-priced ones at that, will of course increase, but to lift their spirits we point out that of the four playoff semifinalists, only Portland and FC Dallas (for little-used Ezequiel Ciriglianoused the TAM option this year and MLS Cup host Columbus has just one DP on its books, playmaker Federico Higuain.

Will this change the perception that MLS is making up new rules to benefit the big-market teams? Of course not.
6 comments about "What will new and Improved TAM mean for MLS?".
  1. Allan Lindh, December 3, 2015 at 2:32 p.m.

    Stuff and nonsense. The clear solution, as obvious as the nose on my face (which is considerable) is to put these financial wizards to work on a limited promotion system. The fair way to expansion is to devise a system that rewards the best 2nd div team, with a good special purpose stadium, and a good fan base, and real financial muscle behind them, to join MLS. It's all about money, figure out how much they need to give you. Then cities that want an MLS team can put their effort into building a great Div2 team, stadium, and team. Don't need to worry about relegation until you get to whatever magic number the traffic can bear. 32 teams divided into E&W divisions sounds about right. Home and away with teams in your division (30 games) and one per year w/ other divsions (16), adds up to 46. A little high, but it would take a long time to get to that total, and before then many other things will happen, vast riches, and/or some form of relegation. Instead they are like the usual elitist closed club, that spend all their time and energy devising schemes to keep others out.

  2. Mark Buckley replied, December 4, 2015 at 7:47 a.m.

    Promotion will never happen, period.

  3. James Madison, December 3, 2015 at 6:04 p.m.

    MLS would do far better to take the money included in the TAM pool, divide by the number of teams and add it to the regular salary ceiling for each team. LA and the Red Bulls and the Canadian teams would then need to manage their way to the top instead of buying or trying to buy their success.

  4. Andrew Busa replied, December 3, 2015 at 6:42 p.m.

    @James Madison

    Red Bulls were the lowest spending team this season.

  5. Carlos Figueroa replied, December 4, 2015 at 11:33 a.m.

    Also LA is one of the leagues top earners. And few organizations are as successful in their youth programs. Zardes is about to be sold, so don't be surprised if they end up with a 5th DP. Galaxy must have the best lawyers around, because they seem to find and exploit every single loophole.

  6. Scot Sutherland replied, December 7, 2015 at 1:34 p.m.

    The Galaxy have a very good General Manager.

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