MLS boosts spending on TAM funds

MLS announced Wednesday it has increased the amount of Targeted Allocation Money (TAM) that teams can spend on higher-salaried players and has also provide additional funds to pay Homegrown players.

Adopted last summer so teams could add an additional high-priced signing without going over the per-team limit of three Designated Players, TAM funds will be increased to $800,000 per team for the 2016 and 2017 seasons. Teams were originally given $500,000 to be spent over five seasons, which is the length of the current CBA.

During a conference call with reporters, executive vice president Todd Durbin explained the league’s intent is that teams upgrade their rosters with additional players who will earn between $457,500 -- the 2016 DP threshold -- and $1 million. A team can use its TAM allotment on a single player or spread it among several players so their salary-budget charge drops below the threshold.

All such players must count at least $150,000 against the salary cap, but if a team wants to use $600,000 in TAM to knock down a $750,000 player to a $150,000 budget charge, it may do so. Durbin said all teams will need to be cap-compliant by March 1, which is a few days before the start of the 2016 regular season. The 2016 per-team salary cap will be about $3.7 million.

Teams using TAM to free up a DP slot are still obligated to sign a player who will earn an equal amount or more than the player whose salary-budget charge is being reduced by TAM. This money cannot be combined with regular allocation money, by which teams can buy down the salary-budget number of players they are acquiring or re-signing.

TAM cannot be held indefinitely: 2016 TAM funds must be used prior to closing of the 2017 secondary (summer) window and 2017 TAM funds prior to the conclusion of the 2018 secondary window. During the conference call, Durbin said no decisions have been made regarding the 2018 season and beyond regarding this version of TAM. He said of the original $10 million made available league-wide last summer, between $3.5 and $4 million has been spent.

In a press release, MLS deputy commissioner Mark Abbott said, “We saw immediate dividends this past season with the initial investment in Targeted Allocation Money, and our owners believe that additional spending -- especially for players who will impact the middle of our rosters -- will make MLS even more entertaining and compelling.”

The league has also increased monies available for players occupying the reserve-league roster slots, those on the lowest rung on the salary scale who normally earn $50,000 to $60,000. Each team can spend an additional $125,000 on these players.
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