Most MLS fans are familiar with the Designated Player rule, a player a club can sign with only a portion of his contract going against the salary cap.
A less understood position is the young designated player. These are 23-year-olds and younger designated players whose cap hit is significantly less. But why are there young designated players and what is the benefit for the clubs?
Essentially, young DPs are players with potential that have other options to go elsewhere. Due to salary restrictions in MLS that don't exist elsewhere, most of the league's teams are unwilling to pay a significant amount on unproven talent. The young designated player option allows clubs to take on a young talent with much less risk.
When David Beckham chose to move from Real Madrid to MLS in 2007, the league wasn't in a position to pay a salary that a player of that caliber would command. To respond to this problem, the league created the Designated Player rule, which allows clubs to pay two players (clubs can buy a third spot for $150,000) a higher salary with only a portion going toward the salary cap. In 2014, each DP, regardless of salary, would cost $387,500 against the $3.1 million salary cap.
After five years of the Designated Player rule, MLS decided to add the young DP in 2012. The league determined that it had stars, youth academies, homegrown players, and regular American players but clubs weren't willing to pay for young international talent. So the league added the young designated player to add an incentive to go after those prospects.
The incentive that the league added was that these players would cost less than a normal DP. A young DP, from 21-23 years old, would cost $200,000 toward the salary cap, while a player 20 years old or younger would cost $150,000 toward the cap. In the first three seasons with the new rule, seven young Designated Players were signed by four different clubs.
While most clubs still use their DP slots on older players, there are advantages to signing young Designated Players. The lesser cap hit gives teams more flexibility with what is considered a low salary cap. Also, when you get an older DP, most are entering their final destination. With young Designated Players, clubs can agree to sell that player later on to a bigger league for a significant profit (for MLS).
During its first MLS off-season, Orlando City SC has already gotten into the young DP market. On Dec. 15, the club signed 20-year-old Honduran international striker Bryan Rochez. In January, when the club signed Colombians Carlos Rivas and Cristian Higuita, there were rumors Rivas could also have been signed to a young DP contract, though we still do not have official word on these signings.
Generation Adidas: OCSC Takes Advantage of Program
Orlando City SC became the first team in three years to draft at least two Generation Adidas players in the same draft. The Lions are maintaining their faith in a development program that has made the club who they are, while potentially ensuring that the program continues into the future.
As a young player with immense talent, Rochez has a greater ability to be sought after by European clubs -- and for a larger transfer fee. If Orlando City decides to sell Rochez in a few years, while MLS would get the transfer fee money, as they own all player contracts, the club would be entitled to more allocation money. This is a product that Orlando CIty has already used to its advantage by buying down Brek Shea's contract so that he will not be a Designated Player.
While there are many convoluted rules and regulations in MLS that most would rather have abolished, the young Designated Player has been a successful addition. Clubs are timid about spending large sums of money on young, unproven talent, but this rule gives the clubs an incentive to do so.
Orlando CIty has already taken advantage of this concept and has expressed interest in doing so again in the future. The success of these young DPs is not guaranteed, but they are a risk that now clubs are willing to make.