MLS adds another method to fund players with a new TAM

One of the buzz words flying around Major League Soccer yesterday was TAM. It stands for Targeted Allocation Money and MLS made a significant addition to the program. Teams will have an additional (nearly) $37 million added to league-wide player compensation during the next two seasons.

The focus is to sign more impact type players further down the roster and also encourage signing more homegrown talent at the same time.

MLS clubs will receive an additional $800,000 in Targeted Allocation Money for the 2016 season and an additional $800,000 for the 2017 season.

According to MLS, TAM is to be used by clubs to "add depth to their rosters by strategically investing in players that make more than the 2016 maximum budget charge of $457,500 (but who are not Designated Players)." This is different than the Designated Player initiative in that all MLS clubs are provided an equal amount of funding.

This is also in addition to and separate from the TAM program introduced over the summer. That allowed teams to receive $500,000 spread over several years.

"By injecting an additional $37 million into the system, our clubs will be able to strengthen the depth of their rosters by signing more high-quality players," said MLS Deputy Commissioner Mark Abbott via press release.  "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."

Homegrown players getting some love

An incremental $125,000 per season will be made available to each club to sign Homegrown Players. Over 150 Homegrown Players have signed with MLS clubs since the league began its youth development initiative in 2007. Sporting Kansas City has signed three so far, Jon Kempin, Kevin Ellis and Erik Palmer-Brown and have a few in the pipeline that seems like good candidates. Presumably this could be used for Academy players that are in college as well.

"Our academies are developing more first-team players every year, and the additional investment will provide more flexibility to our clubs to sign top young players," said Todd Durbin, Executive Vice President of Player Relations and Competition in the press release. "We have seen former academy players like Gyasi Zardes, Bill Hamid and Wil Trapp become leaders on their clubs, and we expect many more academy players of their caliber to sign with MLS clubs in the coming years."

So when will the TAM be used?

The new Targeted Allocation Money must be committed within four transfer windows.  The 2016 TAM funds must be applied prior to the conclusion of the 2017 Secondary Transfer Window and the 2017 TAM funds prior to the conclusion of the 2018 Secondary Transfer Window. The use of the initial $500,000 of Targeted Allocation Money, which expires in 2019, will still follow the guidelines and timeline set forth in the CBA.

The Bullet points

• If TAM funds are used to buy down a player contract to free up a Designated Player slot, then the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing
• TAM funds can be used to sign new players or re-sign current players earning between $457,500 and $1 million
• TAM and general allocation money is not allowed to be combined on a player. Either TAM or general allocation money may be used on a player in a single season but not both at the same time
• The minimum budget charge for a player using TAM funds is $150,000
• Any of the $800,000 in TAM funds that go unused in 2016 will carry over to 2017
• TAM money can be traded by clubs
• Any of the TAM funds that go unused by the end of the 2017 summer transfer window will go back to MLS

Who does this benefit?

Contrary to most MLS rules in the past, this benefits the smaller market and less well funded teams. Clubs with no DP's or lower budget DP's will be able to spend money above the salary cap to bring in more quality players without dipping directly into owners pockets.

Sporting KC could for example use TAM money to pay down Graham Zusi's or Matt Besler's contract and free up two DP slots or pay a current player more without having them count as a DP or they could bring a good talent from overseas to strengthen the roster.