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MLS Makes the Core Player Rule Official-ish

Jaime Valdez-USA TODAY Sports

As tends to be the case with Major League Soccer, that thing we all knew was coming is now here. The "core player rule" is a little different than what we were expecting and comes as a result of what the league is calling "Targeted Allocation Money".

A quick look over the synopsis of the new rule, which was included in the new collective bargaining agreement, indicates that clubs are, as expected, being given $100,000 of allocation money per year for the next five years, which can be "called forward" and used in a lump sum if necessary. There is no specific proviso for adding another designated player slot, as was rumored, but the interesting thing about this allocation money is that clubs may only use it to sign or retain players that will be over the maximum allowed under the salary cap.

In effect, this is encouraging less financially invested teams to bring in designated players, while removing some of the onus of paying for the designated player salary over the cap themselves, while also giving teams that already have designated players a tool to bring in quality assets that they would otherwise not have room for.

Expect plenty of analysis of this new rule over the course of the next few days.

A couple quick take-aways:

  • It is great to see MLS actually sending out a press release explaining how the rule works. Any step toward transparency like this is a good one.
  • There have not been many Timbers-specific rumors floating around the internet, but this seems like something the team could make use of. It is safe to assume that the Timbers have been busy in the lead up to this transfer window, even if they do not make any moves immediately.
  • It will be interesting to see how this plays with the young designated player rules, which have lower maximum cap hits and are currently under-utilized around the league.

The MLS press release:

MLS Announces Additional Investment in Club Rosters
Pursuant to New CBA, Clubs to receive up to $500,000 of Additional Allocation Money to Invest in Rosters over the Next Five Years

NEW YORK (Wednesday, July 8, 2015) – Major League Soccer today announced that each MLS club will receive $100,000 per year for the next five years ($500,000 total) in additional funds to invest in their roster outside of the player salary budget.  These funds, referred to as Targeted Allocation Money, are in accordance with the new Collective Bargaining Agreement that was concluded prior to the start of the 2015 season and are available to the clubs today, July 8, 2015, concurrent with the opening of the Secondary Transfer Window.

These funds will be in addition to the Allocation Money that has been previously made available to clubs.  For a description of Allocation Money, please see the 2015 MLS Roster Rules and Regulation.

Similar to general Allocation Money, Targeted Allocation Money may be used to sign new or re-sign existing players. In addition, Targeted Allocation Money may be traded.

Unlike general Allocation Money, which may be used to sign players earning any amount, Targeted Allocation Money may only be used to sign or re-sign players who earn more than the maximum salary budget charge (but who are not Designated Players). In 2015, the maximum salary budget charge amount is $436,250.

Importantly, unlike Designated Players for which a club is responsible for any payments above the maximum salary budget charge, all clubs will be provided the same amount of Targeted Allocation Money through the League budget.  As a result, all clubs will have the same opportunity to benefit from these new funds.

MLS clubs may bring forward a portion or all of their allotted Targeted Allocation Money, up to $500,000, to be used in a single season on up to three players at a time.  For example, if a club wishes to sign a player at or above the maximum salary budget charge this season, that club may use up to $500,000 of their Targeted Allocation Money this year to acquire him.

Additionally, going forward clubs may use a portion or all of their allotted Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down, on a prorated basis, his salary budget charge to at or below the maximum salary budget charge.  If Targeted Allocation Money is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.

Targeted Allocation Money and general Allocation Money may not be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.

While MLS clubs are not required to use their full $100,000 each season, they are required to use the remaining amount during the following year.  For example, if a club does not use its $100,000 allotment in 2015, that club must use or trade at least that $100,000 of Targeted Allocation Money in 2016.