The off-season is here again in MLS, which naturally means a whole slew of rule changes. This year, the league is asking owners to chip in quite a bit more with Discretionary Targeted Allocation Money (Discretionary TAM). Owners may purchase up to $2.8 million of the new Discretionary TAM on top of the $1.2 million of TAM provided by the league in 2018 for a grand total of $4 million in TAM alone and the potential to double a team’s roster budget space.
There are plenty of moving parts when it comes to MLS roster building and the vagueness of assets available to clubs makes accurate analysis difficult. It doesn’t help that Orlando is in a bit of an allocation hole after the record-breaking deal for Dom Dwyer that has quantities of allocation money changing hands from Orlando to Kansas City over the course of the next year and potentially beyond. Because Orlando made the cash swap for Dwyer, it will likely need to dip into those Discretionary funds if the club wants to level the playing field as much as it can. The new discretionary funds can’t be traded like the base sum and it would all need to be applied to the roster. But the amount of Discretionary TAM could open up multiple new opportunities should Orlando purchase it.
After declining the options of Giles Barnes and Antonio Nocerino in November, Orlando City currently has just two players utilizing Targeted Allocation Money — Jonathan Spector and Dwyer. Yoshimar Yotun’s salary (just under $600,000 in 2017 according to the MLS Players’ Union) could easily be bought down even without these new funds, opening up a coveted DP spot. Because of the restrictions on TAM, the DP tag can only be taken off using TAM for the express purpose of signing a new DP.
But Yoshi might not be the only current DP to lose the tag. The new money would mean using TAM on Carlos Rivas and would not only allow the team to have all three DP spots available, but he could be brought down below his current cap hit ($200,000 as a Young DP) because TAM can be used to buy players all the way down to a $150,000 cap hit. With only $1.2 million in TAM to go around, spending up to half of it to buy down Rivas and not gain any cap room isn’t a great use of assets. With so much more in play, the club can rest easy spending a much smaller percentage of its assets on Rivas while also being able to open up more space for other players.
Instead of spreading out the TAM to buy several players down like Orlando did in 2017, it could be used to buy down players like Rivas, Spector, and Yotun to the minimum $150,000 instead of the max cap hit of just over $500,000 in 2018. If Orlando goes this route, it would open up an extra $750,000 of regular cap room that could be spent on other players, whether that’s to compensate for raises or bring in players at or under the maximum cap hit without spending any General Allocation Money (GAM), which is in far shorter supply.
On top of all of that, there’s a new ceiling on who qualifies for TAM. In 2017, players with cap hits over $1 million were automatically Designated Players. But in 2018, extending Dwyer doesn’t necessarily mean making him a DP with the increase of the TAM cap to $1.5 million. If Dwyer were to re-sign for something at or below that number, there is now the potential to give him plenty of help with three new DPs.
The potential is enormous. In a hypothetical scenario where Dwyer re-signs on a new contract that is eligible for TAM, Orlando could afford to buy down all four of Dwyer, Rivas, Spector, and Yotun and still have $150,000 of the new Discretionary TAM left over. Any of the base TAM that the Lions have left over after the Dwyer trade could be dipped into to bring in another player over the maximum cap hit without even touching their GAM cache. And if Orlando decides to move on from Rivas, it would open up a DP spot, $200,000 in cap space, and allow the team to spread that $600,000+ in TAM to a new player or two.
But all of this is only possible if Orlando City’s ownership decides to buy in. As the league trends more toward ownership responsibility for roster building and spending, investing smartly is becoming paramount to building a contender. Teams that buy into the Discretionary TAM could quickly pull away from clubs that don’t, and it could have an immense effect on Orlando City’s season in 2018.