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DP’s and Allocation Money

Posted on by Peter C

ch ching DPs and Allocation Money

I suspect you’ve all heard by now about the rule change in MLS regarding Designated Players. Here is the transcript of the press conference in which the changes were outlined in detail by Todd Durbin of MLS. One thing that emerges from this is the heightened importance of one of the leagues more arcane intricacies, allocation money.

From the MLS website(the old one, I didn’t even bother trying to find this info on the new site) …

A club receives allocation money for (1) poor performance during the preceding MLS regular season; (2) the transfer of a player to a club outside of MLS for value; (3) roster purposes due to expansion status; and/or (4) exceptional circumstances as approved by the Competition Committee.
Each year the MLS Competition Committee determines the allocation amount to be made available to each team. Allocation money can be traded by teams. Allocation money does not count against a team’s salary budget and can be used:

  • To sign players new to MLS (that is, a player who did not play in MLS during the previous season).
  • To re-sign an existing MLS player, with League approval.
  • In connection with the exercise of an option to purchase a player’s rights or the extension of a player’s contact for the second year provided the player was new to MLS in the immediately prior year.

    Allocation money cannot otherwise be used to buy down the salary budget number of players already under contract to the League, nor can allocation money be used to buy down the budget number of a Designated Player.

    The section in bold is the big change. According to the press conference.

    clubs have the option of “buying down” the budget charge of a designated player with allocation money. The reduced charge may not be less than $150,000. Allocation money are funds, separate from the club salary budgets, provided by the League based upon finish in the previous season, fees collected for the transfer of a player abroad, expansion or exceptional circumstances. Allocation money may be used to reduce the portion of a player’s compensation that counts against a club’s salary budget in connection with signing players new to MLS, or re-signing existing MLS players at the end of their contracts.

    In practical terms, under the old DP rules, if a team had 2 DP slots(RBNY) and used both of them, the team’s salary cap would take a hit of $750,000(415k + 335k). Now, if you have $370,000 in allocation money laying around, you could use that money to drop the salary cap hit to $300,000 for two DP’s. This of course also means you need enough allocation money to ‘buy down’ the salaries of any player(s) with current compensation between $335,000-$415,000 as they would otherwise fall into the DP salary range and would need to be declared DP’s. Some players that fall into that category are: Brian McBride($385,300+), Jaime Moreno($355,000), Sharie Joseph($450,000), Taylor Twellman($420,000) and Dwayne DeRosario($425,750). These numbers were taken from Player Salary Information page of the Major League Soccer Player’s Union website. And of course, the same applies to the 3rd DP. Should a team want to pony up the $250,000 that a 3rd DP slot will cost them, it begs the question, who knows how much allocation money teams have on hand? Good luck finding that out.

    It going to be very interesting to see what moves are made(or not made) this season. The first window to obtain players closes on April 15, the next window opens July 15, after the World Cup.

    p.s. I have never indulged in rumors, but this one was just too juicy and somewhat applicable to the DP story. Sorry I lost the link to the site where I originally saw it…

    Barcelona allows Thierry Henry out of the last year of his contract and permits him to move to MLS for no transfer fee. In exchange, MLS grants Barcelona a team franchise for an expansion fee of zero.


  • 16 Responses to DP’s and Allocation Money

    1. bigvic says:

      uh, no way MLS gives Barcelona a free franchise team. Henry is not worth 40mil.

    2. Oscar says:

      I’m really glad about this. It’s always weird to see a Sounders crowd, usually double the attendance of other MLS teams, and think about how they’re not allowed to even use that hard-earned cash.

      • Charles says:

        Not saying I don’t want more talent in MLS, but I still want parity too. It is what makes the league great ( although makes some teams worse to accomplish it ).

        But how is the Sounder’s cash “hard earned” exactly ? The franchise is one year in and the fans were there to correct all the mistakes all the way through the year. Do the fans deserve it, yes, but that is true of a fans supporting Dallas with only 8,000 of his friends too…

      • bigvic says:

        amen! its not like Seattle Sounders’ fan live in a bubble in terms of world football knowledge. They see the sort of product that European leagues can produce, and Sea’s owners know they closer they come to that product the crazier their fans get. Here’s a thought KC, SJ, and Dallas, how about investing more so you dont have to worry about Seattle’s domination?

    3. CTBlues says:

      I hope Henry goes to the Red Bulls even though he single handedly kept Ireland out of the World Cup.

    4. free bet says:

      He is likely to go, just as Raul will retire from Madrid end of season

    5. JackR says:

      I hope that the RBNY has enough allocation money for three dp. If they do have enough money, red bull arena will be rocking.

    6. Rory says:

      Isn’t funny how many people are taking shots at the new MLS page, especially funny when it comes from people who have webpages that look like something a 9 year old girl could do with WordPress!

      • The Gaffer says:

        Rory, are you referring to this site — MLS Talk — in your comparison of a WordPress site that looks like a 9 year old girl could do with WordPress? I hope not.

        I realize that web design is very subjective, but I would counter your opinion by stating that this site is built on WordPress for a reason – so it’s easy to use and reliable. The design of the site was done by one of the leading web design agencies in the country (who have won several major awards).

        Cheers,
        The Gaffer

    7. Peter C says:

      Rory,

      While some of the complaints about the new MLS site have been about its design, the bigger issue, which I hope you are not ignoring, is the failure to provide information. MLSNet might not have been the prettiest site, but scores were accurate as were game times(since corrected). The links worked and the focus was on MLS. I went to the new site earlier this week and the first story was about football in England. That’s the equivalent of going to the NBA home page and having the lead story be about the Greek basketball league. I won’t go on with the litany of problems from an informational point of view. Fake Sigi(http://www.fakesigi.com/2010/04/mls-web-site-disaster.html) did that far better than I could.
      The rollout was premature. The site was very obviously not ready and should have been postponed. Not the act of a league that wants to be thought of as ‘big time’.

      • Flex Buffchest says:

        I agree. I’m tired of seeing EPL games headlined on the MLS website too. It’s ok to mention some big games for EPL towards the bottom of the site or something, but to have it broadcast as a main headline? mlssoccer.com still has some bugs to be worked out, but overall, it looks way better than the previous.

      • CoconutMonkey says:

        That’s kind of unfair. All the main stories (at least right now) are MLS headlines.

        As for the missing info, it’s obvious that it wasn’t ready for prime time on opening day, but MLS wouldn’t be the first group of dudes to roll out a website with a few kinks. Hell, even Microsoft and Apple have a few broken links here and there.

        Biggest complaint: I can’t use MatchDay live because of the fracking region lockout! All I want to do is give them money and watch my games. But nooo, I have to go to Justin.tv and watch a crummy, constantly disconnecting stream because my computer isn’t in North America. C’mon MLS, take my money!

    8. Alex says:

      I hope Barcelona brings a team to New York city, NY (not new jersey) that way Henry can play for his dream city and Barcelona can work something out with his contract but I don’t want the club to be called bracelona new York.

      independent clubs and open market is the way to go.

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