Major League Soccer on Wedensday announced an additional investment of funds that will offer every team the opportunity to retain and add talent that will make an immediate impact on the field.
The initiative, as outlined within the Collective Bargaining Agreement that was concluded prior to the start of the 2015 season, will provide each MLS club with $100,000 per year of what is referred to as Targeted Allocation Money for the next five years, for a total of $500,000 per team.
Similar to general Allocation Money, these funds may be be used to sign new or re-sign existing players. Unlike general Allocation Money, however, Targeted Allocation Money can only be used for players earning more than the maximum salary budget charge, which in 2015 is $436,250.
Teams may also use Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down his salary budget charge to below the maximum salary budget charge. When using Targeted Allocation Money to free up a Designated Player slot, a club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.
For example, if a team wants to bring in another talented player who will carry more than the maximum salary budget charge, it has two options should it choose to utilize Targeted Allocation Money. First, a team could use the funds to buy down that player's charge to below the maximum and keep the Designated Players it currently has.
Or, a club could use the funds to buy down the salary budget charge of one of its existing Designated Players to below the maximum, provided the club then signs a Designated Player at an investment equal to or greater than the player being bought down.
Targeted Allocation Money may also be traded.
The Targeted Allocation Money will become available to the clubs immediately, concurrent with the opening of the Secondary Transfer Window on July 8, 2015.
Targeted Allocation Money may not be used in conjunction with general Allocation Money on any one individual player in a single season.
MLS clubs may bring forward a portion or all of their allotted Targeted Allocation Money, up to $500,000, to be used in a single season on up to three players at a time. For example, if a club wishes to sign a player at or above the maximum salary budget charge this season, that club may use up to $500,000 of their Targeted Allocation Money this year to acquire him. A club that uses all of its allotted money will not receive more Targeted Allocation Money unless they acquire it from another team.
While MLS clubs are not required to use their full $100,000 each season, they are required to use the remaining amount during the following year. For example, if a club does not use its $100,000 allotment in 2015, that club must use or trade at least that $100,000 of Targeted Allocation Money in 2016.