Rumors have surfaced that the MLS front office is considering increasing Targeted Allocation Funds for each team to $2 million for 2018.
Targeted Allocation Money. For those unaware, Targeted Allocation Money, more commonly referred to as TAM, is a mechanism used by Major League Soccer teams to acquire players with a significant salary demand while having them fit into the league’s $3.8 million salary cap structure. That cap is allotted to the team’s first 20 roster spots. While Designated Player player spots are given to up to three, high-dollar players per team (most notably Kaka, David Villa, and Bastian Schweinsteiger), TAM funds are in place to help teams acquire more players in the $500,000 to $1.5 million salary range, being used to “buy down” the player’s contract to better fit into the cap structure.
The league has only had TAM since the summer of 2015, but the amount available per team has quickly jumped since its introduction. When first introduced, each team was allotted $100,000, but in 2016 that jumped to $800,000, then $1.2 million before the 2017 season began. Midway through 2017, it looks like that trend will continue.
Can confirm. From what I've heard, the league is considering up to $2M/team next year. Would be usable on "young players," per sources. #MLS https://t.co/Q3TjysN0ep
— Jeff Rueter (@jeffrueter) August 2, 2017
Targeted Allocation Players
These special funds have allowed the overall playing level of MLS to drastically increase. Some notable TAM players who have brought their talents to the US include Francisco Calvo, Luciano Acosta, and Victor Vasquez among others. The funds have also been used to keep domestic talents like Matt Besler, Steve Birnbaum, and Darlington Nagbe, while also helping teams maintain talents like Mauro Diaz and Dom Dwyer.
Increasing the TAM funds is intended to encourage teams to purchase similar young talents to fill out their rosters. Players like MLS goal scoring leader Nemanja Nikolic, exciting Dynamo attackers Albert Elis and Cubo Torres, and even the class of 2016’s summer transfer window, Nicolas Lodeiro could effectively be “bought down” into a more cap friendly position, allowing teams to increase spending on the Designated Player positions.
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Encouraging teams to spend on younger players in those salary ranges has already paid dividends on the field. The level of play around the league is at an all time high, with key players and contributors being notably younger. The new TAM budget means teams effective have an over 50% increase to the salary cap that already reduces the price of Designated Players to around $1.5 million for all three. Look for even more exciting signings in 2018.