Targeted Allocation Money (TAM) are funds strategically provided by the league to teams to add or retain players that will make an immediate impact on the field.
First announced in July 2015, each team initially received $100,000 in TAM per year for the next five years. Subsequent increases raised the amount of TAM given to each team to $800,000 per year in 2016, $1.2 million per year for the 2017 season and $1.2 million per year plus an additional $2.8 in optional, discretionary TAM for 2018 and 2019.
TAM may be used in the following ways:
- In order to use TAM on a player, that player must earn more than the maximum budget charge ($480,625 in 2017) in annual salary. The compensation ceiling for such players is set at $1,000,000 per year, unless the TAM is being applied midseason to buy down the budget charge of an existing Designated Player.
- Clubs may use a portion or all of their available TAM to convert a Designated Player to a non-Designated Player by buying down his salary to at or below the DP threshold ($480,625 in 2017). If converted during the secondary transfer window, the DP in question may earn a maximum of $1.5 million on a prorated basis. If TAM is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing as a DP.
- Clubs retain flexibility to convert players previously bought down with TAM back into Designated Players if they have a free DP slot.
- Targeted Allocation Money and General Allocation Money may not be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player.
The minimum salary cap hit for a player who is bought down with Targeted Allocation Money is $150,000.