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Additional Targeted Allocation Money Means Big Change for MLS Clubs

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MLS’ $400,000 increase in TAM allocated to each club will allow those teams much more freedom in acquiring or retaining players in 2017.

Real Salt Lake v Orlando City SC Photo by Alex Menendez/Getty Images

This week, Major League Soccer announced that it was once again increasing the amount of target allocation money that each of the league's teams would receive. After starting at $500,000 in 2015, the year the new money was unveiled, the league increased that amount to $800,000 in 2016 and has increased that number to $1.2 million for 2017. But what does this increase mean for the league's teams?

One of the big disadvantages for MLS clubs in acquiring big name players is the lack of money they have to spend. Like just about all other American sports leagues, MLS has a salary cap. Unlike any of the other major leagues, MLS also owns all clubs and player contracts so there really is no way for clubs to go over that cap. That severely limits the amount of money a club can offer a player.

When MLS first unveiled TAM, there were several advantages that could be taken from the newly allocated funds. One of those advantages was to be able to use this money to obtain the services of overseas players that otherwise wouldn’t be affordable or to retain the services of a current star thinking of transferring overseas. Additionally, TAM can be used to buy a player down under the rate of a Designated Player, meaning that they would be paid like a Designated Player but not take up one of those valuable spots.

For a team like Orlando City, this news could have a significant impact. While 2017 will be Kaká's last season in purple, he will still be a Lion for the coming year. Depending on any moves made during the remaining months of the offseason, Orlando City may already have all three of their Designated Player spots filled when the start of the 2017 MLS season arrives. That could potentially mean the departure of a key player or two that the club would not be able to afford.

One such player is Cyle Larin. The Canadian striker has netted 31 goals in 59 appearances since being the number one overall draft pick in 2015. Rumors were wide spread last season that Larin could be on his way out this off-season, being linked to big European clubs such as Roman giants Lazio. With this additional TAM being made available, the possibility exists that Orlando City could buy down one of its Designated Players and offer one of those spots to Larin.

Another reason why this increase in TAM is significant is because of the restrictions when it comes to spending said money. TAM cannot be added to general allocation money to buy down a player's contract and remove his Designated Player status. Given the amount of time that each club has to spend their TAM — four transfer windows or two years — and the fact that they cannot combine allocation money, made the amount of TAM insufficient. This increase will give clubs a much greater opportunity to use that money to make significant moves like bringing in a key player from overseas, retaining the services of a key player that otherwise might leave, or buying down a player's salary to obtain an additional Designated Player.

While MLS Commissioner Don Garber's comments on the league's potential expansion to Miami may have taken up much of the publicity for the league over the past week, it wasn't the most significant news. The $400,000 increase in TAM for each MLS club will give each club much more flexibility in how they handle their rosters. For Orlando City, it may mean that the Lions will be able to retain the services of a key player like striker Cyle Larin, who otherwise may have left for a European club. It still remains to be seen exactly how much impact this change will have but the league is moving in the right direction in giving its clubs more freedom in acquiring talented players.