Remember last year when Sporting Kansas City traded their star center forward to Orlando City? Who am I kidding, of course you do. Dom Dwyer was sent back to Florida in exchange for $1.6 million in allocation money because he didn’t want to sign his offered contract extension with SKC.
Now over six months after the trade was made, it appears there is more value in that $1.6 million than was originally disclosed. It’s not that that was literally more money, but that a chunk of that allocation money is worth more than it may have originally appeared to be worth. Let me explain.
In a move last week that could be described as “Peak MLS,” Toronto FC traded $337,500 in Targeted Allocation Money (TAM) to D.C. United in exchange for $250,000 in General Allocation Money (GAM). Sam Stejskal breaks it down pretty well, but basically that means every dollar of TAM is worth 1.5 dollars of GAM, at least by the math of this trade (it could turn out that ratio is low). The differences can be fairly complicated but Matt Doyle has a pretty simple explanation that I like.
Yeah. I guess it's case by case, too. Rule of thumb for both:— Matthew Doyle (@MattDoyle76) February 6, 2018
GAM = make "almost" pieces fit
TAM = get big fancy new pieces entirely
What he’s basically getting at is that TAM can be used to sign players worth about $500,000 to $1.5 million or to buy down a Designated Player to make room for an even bigger signing. While GAM can be used on basically anything, essentially buying down whomever on the roster you need to to comply with the “salary budget.”
How Does this Apply to Sporting KC?
In the Dwyer trade from last summer there was $900,000 of guaranteed money and $700,000 in incentives. Peter Vermes has confirmed Kansas City hit all those incentives. The problem is, of the $700,000, we don’t know how much is GAM and how much is TAM. We do know of the original $900,000 that $400,000 is GAM and $500,000 is TAM.
That means, if we are conservative and assume only the $400,000 in disclosed GAM is all the the GAM the team received, that it’s basically worth $600,000. If we are extreme and assume all $700,000 in incentives will come in the form of GAM and then you combine that with the original $400,000, it turns $1.1 million into $1.65 million (plus another $500K in TAM). The likelihood is that it’s on neither end of the extreme.
Mike McGrew, who has fantastic tables and charts of GAM/TAM for Sporting KC, is being conservative and saying all the incentive is TAM (at least in the last Tweet I saw). Mike is a fantastic source for all information about weird MLS salary rules, but I’m tending to think there is more GAM coming in this deal. Each MLS team gets at least $200,000 in GAM every season and Orlando was flush with GAM from the Kevin Molino trade ($450K of the $650K received was GAM). Not to mention Vermes indicated the money was coming over several transfer windows, so it’s likely some of that money will come from the 2018 pot of Garber Bucks.
But to be simple, the $1.6 million could really be “worth” as little as $1.8 million or as much as $2.15 million. That’s a lot of scratch. It makes the fleecing Sporting gave Orlando some how look even worse for Orlando six months later.
How Will it Get Spent?
Now the real question is how will SKC use this money? Many fans are of the mindset that the team must signed a Designated Player at the #9 spot or this offseason is a bust. That signing seems less and less likely to come before the start of the season, but the team hasn’t given up.
However, what all this allocation money, and specifically GAM is allowing the team to do is buy down the cap charge of basically any player. On the other hand, TAM would specifically have to be used to buy down a new signing that falls in that $500K to $1.5 million range. That’s like Johnny Russell, who is a reported TAM level signing with a transfer fee of approximately $350,000 and an unknown salary.
TAM also is likely to be used on current DPs who will be bought down to bring in new signings Yohan Croizet and Felipe Gutierrez. That means players like Roger Espinoza and Graham Zusi, who ended the season as DPs could be bought down to make room. And let’s not forget that SKC can also buy another $2.8 million in Discretionary TAM if they need more.
Random side thought: I’m not sure Gerso is going to be a DP this year regardless. While he was a DP in 2017 with a salary of $591,258, Vermes repeatedly said he was a DP because of his transfer fee. It’s obviously with Atlanta spending big in 2017 on DPs that those transfer fees fall off the books in year two because they’ve already spent big again in 2018 and are being linked to several other players who’s fees alone would make them DPs. Random side note over.
So even if everyone is freaking out about the lack of a center forward signing, know this Dwyer money is being well spent. It would appear Matt Besler’s $758,250 salary needs a generous sum of GAM to buy it back down for 2018 since TAM was presumably used last year with one of the new signings coming in and Besler no longer being considered a DP. Not to mention Ike Opara and Tim Melia got new deals that could very well need to be bought down. And if not theirs, Ilie Sanchez will be due a raise if he continues his great 2017 form.
Then again, this team does need some goals. Just know that no matter how it turns out, Dwyer couldn’t possibly live up to the amount of money Orlando gave up for him.
This article originally had the $400K in GAM and $500K in TAM reversed. It has since been corrected and the subsequent math updated.