More TAM means more pressure across the board for MLS clubs

• by Ridge Mahoney  @ridgemax, Dec 10, 2015

Just a few days after the 2015 MLS season ended with Portland winning its first league title, the landscape for 2016 already looks dramatically different.

Despite the fact that less than half of the teams used Targeted Allocation Money (TAM) to bolster their rosters after the mechanism was officially announced in July, MLS executives have deemed it such a success there will be a lot more to spend in such a manner during the next two seasons, and presumably beyond.

Each team will receive $800,000 per season in TAM for 2016 and 2017 by which the league intends they will add players earning between $500,000 to $1 million and significantly upgrade that tier of the roster below the DP level.

“We believe that the best way to achieve our strategic goal is to ensure that the money is targeted and spent in this area of the roster, that we believe -- at least in the short-term -- is in our greatest area of need, and will also provide the greatest level of improvement in the product on the field,” said MLS executive vice president Todd Durbin in a conference call with reporters on Wednesday.

Durbin doesn’t set the policies and procedures by which MLS regulates its acquisition and compensation of players. Much of what is implemented by MLS comes out of committees -- Competition Committee, Expansion Committee, Disciplinary Committee, etc. -- and to address the issue of what it presents, i.e. the product, it formed the Strategic Product Committee, which -- working with other committees, of course -- formulated the TAM program that was approved by the Board of Governors.

During the conference call, Durbin outlined a process by which a numerical rating was calculated for every player in the league and those ratings were used to compare MLS teams against each other, and also against players arriving from Europe or those going abroad and coming back. With those metrics was devised a method to help teams upgrade the middle portion of their rosters by signing players of significant talent without them counting as DPs.

As before, teams are restricted to three DPs, defined as players who salaries count the DP threshold against the salary cap. They can use TAM or general allocation money to buy down the contract of a player, though they cannot use both on the same player contract.

MLS champion Portland was another of the teams who acquires a player using TAM, which enables teams to buy down the salary-budget charge of a Designated Player ($436,250 in 2015, $457,500 in 2016) so he doesn’t count as a DP. The Timbers used TAM to buy down the cap hit of forward Fanendo Adi and sign Argentine forward Lucas Melano, who played 13 games (eight starts) during the regular season and scored one goal, and then started three of six playoff matches and tallied a spectacular clincher in the second leg of the conference finals against FC Dallas.

Melano is the type of player MLS wants more of. He’s 22, a talented attacker, and should hold down a starting spot and thus upgrade the Timbers first XI for both league play and international competition. In the Concacaf Champions League quarterfinals to be played next year, four MLS teams are paired against Mexican League opponents. League commissioner Don Garber repeatedly stresses the importance of MLS success in that competition.

The amount of allocation money given to teams that qualify for the CCL isn’t publicized but it’s not a lot, certainly much less than all of them will receive in TAM. Rather allotting money “targeted” for the CCL teams and those that miss the playoffs, the league is supplying Targeted Allocation Money aimed at roster spots across the league.

Other TAM acquisitions included: Johan Venegas (Montreal) and Gaston Sauro (Columbus) had their contracts brought down to fit under the salary cap and Anibal Godoy (San Jose) had his contract bought down as the Earthquakes already had three DPs. Chicago used TAM to buy down the contract of Kennedy Igboananike so it could sign former TFC striker Gilberto off waivers. Seattle used the funds directly to acquire defender Roman Torres and buy down his contract as well as buy down the contract of Osvaldo Alonso so it could add Nelson Valdez as its third DP; and FC Dallas negotiated a loan deal by which Ezequiel Cirigliano was acquired on loan from River Plate.

That’s a small sample size from which to draw any conclusions and the data base is limited by a torn ACL that sidelined Torres in his fourth appearance. Of the $10 million allotted in July (20 teams at $500,000 per team) teams have spent less than one-half; between $3.5 million and $4 million, according to Durbin.

But while it can’t truly be described a booming success as per the league’s justification for expanding it, its effect in 2016 and 2017 is almost assuredly going to be significant if not severe, in that it ratchets up pressure on teams not only to spend -- they are kicking in $800,000 to the general fund -- but spend wisely. A few teams are already under fire for signing less than the three-DP maximum and showing little ambition to step it up, or to do better than add another DP attacker to a team that already has three, as in the case of Chicago.

In the three trades announced Monday -- Lamar Neagle from Seattle to D.C. United, Chris Pontius from D.C. to Philly, and Cristian Maidana and Andrew Wenger from Philly to Houston -- TAM and general allocation money went in the other direction.

The track record of some teams is that they will screw up, no matter what resources are provided or how they can be used. Yes, Toronto FC finally made the playoffs after piling up the league’s biggest payroll – nearly $22 million, according to spotrac –- but it squeaked into the postseason as a sixth-place team with a leaky defense and succumbed to Montreal, 3-0, in the knockout round.

The Galaxy’s total payroll was just under $20 million and while it stumbled this year in the playoffs, its three titles in the past five seasons indicates it knows now to use its considerable resources wisely. It must again buy down Gonzalez’s contract or restructure his deal if he’s on the roster in 2016 and also keep DPs Robbie Keane, Steven Gerrard and dos Santos. The team could use general allocation money to do this but would need a lot of it. 

It still has to find ways to accommodate Dos Santos’ cap hit, since in 2015 he counted for only one-half of the DP salary-budget charge as a midsummer signing. The per-team salary cap in 2016 will be about $3.7 million (under terms of the CBA, it rises 5 percent each season.)

The adaptation of TAM could be a rising tide that floats all boats, but the tightest ships and the smartest crews usually outrace the others.