Nearly five years ago, Sporting Kansas City dealt striker Dom Dwyer to Orlando City in a record setting trade. The deal was reportedly for up to $1.6 million in xAM, both Targeted Allocation Money (TAM) and General Allocation Money (GAM). This week, a bigger deal was finally made when Paul Arriola was traded from D.C. United to FC Dallas for a guaranteed $2 million in GAM with another $300,000 available based on performance. So up to $2.3 million.
On the surface, it is obvious that $1.6m is smaller than $2.3 million, but there is a huge caveat. We’ll get to that in a second. First, let’s break down the haul from each trade.
Sporting KC Received for Dwyer:
- $400,000 guaranteed in GAM
- $500,000 guaranteed in TAM
- $700,000 in xAM (not specified) in performance incentives (SKC has been confirmed to have met these, which were initially thought to be “easily achievable”).
D.C. United to Receive for Arriola:
- $2,000,000 guaranteed in GAM
- $300,000 in GAM (as TAM can no longer be traded)
Even if the incentives aren’t met (I haven’t seen an indication of what the incentives are yet), $2 million is more than $1.6 million. However, there is a new wrinkle as of 2020, to keep in mind. The market is absolutely flooded with GAM, as Paul Tenorio points out.
Teams went from $250k basement in GAM in 2019 to $1.525 million in 2020 (and 2021/2022 after COVID delays in timeline). That goes to $1.9 million in 2023, then $2.585 in 2024, $2.83 in 2025, $3.093 in 2026, etc., etc. So just a lot more GAM floating around out there.— Paul Tenorio (@PaulTenorio) January 20, 2022
There is six (!) times as much GAM on the market now as was available back in 2020 (and earlier, like when the Dwyer trade was made in 2017). A minimum of $250,000 was given to each team in 2019 and now it’s $1.525 million. It’s basically inflation, which is something we are all too familiar with right now. There is more money in the market, therefore, that money doesn’t go as far because prices are drifting up.
The increase of GAM was a response in the CBA negotiations to MLS adding Targeted Allocation Money (TAM) which was primarily getting spent on outside signings. As you can see from many of the big trades the last few years, GAM is more flexible. Everyone wants it because you can spend GAM on any contract versus TAM is mostly for new, outside signings.
One other point worth referencing is in the past, the GAM/TAM exchange rate would further complicate these things. Because of this influx of GAM, the exchange rate is now unknown as there haven’t been any GAM for TAM (or vice versa) trades recently.
If all this weird Garber Bucks talk doesn’t make any sense, just know this. Peter Vermes really worked over Orlando City in this trade. Dwyer had refused to sign a contract extension, so theoretically SKC were sitting on a depreciating asset. Yet they still made a trade that had its record stand for nearly five years (and arguably, still stands). The record book will show this FCD/DCU Arriola trade holds the record, but we’ll all quietly know there is more nuance to the conversation.
So all these years later, people still cry foul on the Dwyer trade, but you can’t pass on that deal. Plus, the team was changing and Dwyer was no longer a good system fit (though how hilarious would it be if he came back). The questions now becomes, when will Trader Pete strike again?