No Matter What, the Numbers Work for Nemeth

On Monday, Sporting Kansas City made the announcement that their former player, Krisztian Nemeth, would once again be a current player after a trade with the New England Revolution. It seems to be relatively universally regarded as a good deal for Sporting KC based on the price they paid and the report that the Revs are on the hook for more than half of Nemeth’s remaining 2018 salary. That salary by the way, is just north of $1 million, or four times what Sporting KC paid him in 2015.

Even knowing all that, SKC still got a smoking deal. First, it’s important to understand that General Allocation Money (GAM) is worth more than Targeted Allocation Money (TAM). It gets funky but some Garber Bucks are worth more than others. To simplify, every dollar of GAM is worth 1.5 dollars of TAM (if you want to go deep, we’ve done that for your previously).

It’s not just the GAM to TAM exchange rate that matters though. First, let’s go over what was traded:

Sporting KC receive: Krisztian Nemeth

NE Revolution receive: $250K TAM, $100K GAM, SKC’s natural 2020 1st Round SuperDraft pick

In straight dollars alone it looks like Sporting KC are coming out ahead but when you start to do GAM/TAM conversions it gets crazy. This gets into the weeds quick, so going forward, I’ll only use TAM unless labeled otherwise. That means when you see eTAM (equivalent TAM) it’s converting GAM to TAM at the 1 to 1.5 ratio.

Sporting KC sent away $400K ($250K TAM + ~$150K eTAM) for a player that New England gave up $500K ($200K TAM + ~$300K eTAM) to move up to get. In addition to that the Revolution threw in an international slot for the rest of 2017 and all of 2018 in their trade with the Columbus Crew. Sporting KC traded an international slot for ~$150K in eTAM earlier in the 2018 season. If you assume half a year is worth another ~$75K eTAM, then you are at $725K paid by New England.

Of course the Revs get a 1st round pick back, though if SKC keep bombing out in the first round of the playoffs then a mid-teen pick is worth ~$112.5K eTAM. The value only gets worse if Sporting KC finish better. If Sporting do terrible in 2019, that 2020 pick could be worth a lot more, but Sporting are one of the most consistent teams and the SuperDraft keeps getting worse and worse so we’ll choose not to entertain that idea. So, that brings the math to $725K that New England paid and only $512.5K they got back.

Another thing a lot of reports are leaving out though is that the Revolution made a trade to move up previously from the fifth spot in the allocation order to the second spot, well before the whole Nemeth move went down. It was from the second spot that they made the deal to trade for the first spot to eventually land Nemeth. Many are probably leaving it out because it’s complicated. They gave another $175K in GAM (~$262.5K eTAM) to the San Jose Earthquakes for the spot but as a part of the deal they would give either $175K in TAM back in 2018 or $100K in GAM and $75K in TAM (~$225K eTAM).

There is no indication what would trigger one deal over the other. If we use the GAM/TAM ratio, worst case NE paid another $87.5K in eTAM and best case another $37.5K. So it’s nothing much, but it’s even more money the previous Revolution coaching staff paid to trade for Nemeth, who they ultimately sold low and barely used (21 appearances, 643 minutes).

TL;DR

If that got way into the wonky for you, here is a quick breakdown. The total the Revs paid is either $762.5K (best case) or $812.5K (worst case) while only getting back $512.5K. So they lost either $250K or $300K before salaries are even paid. They also are paying at least $750K in salary in 2018 plus another $654,867 in 2017 salary ($1.4 million+).

So even though Nemeth isn’t the Designated Player center forward signing that Peter Vermes and SKC brass have been promising, he’s coming in at under $250K in salary for the rest of the season which is a salary that lands him between Cristian Lobato ($240K) and Diego Rubio ($267K) on the salary chart. Even if he’s just another option on the wing, that’s a pretty good deal. Though Vermes insists his best position is center forward.

Oh, and none of this even takes into account that Nemeth was sold for a ton of money two seasons ago. Some reports had it as high as $3 million (though the Star just said $1.5 million). Sporting used that money to improve the club, buy down salaries and who knows what else. If Nemeth is even a fraction of the guy he was in 2015 fans will be thrilled. And I’m personally thrilled anytime someone can stick to it a Bob Kraft owned sports team.