New fan here...

[Ryan D]

Hey everybody! Just recently got into the team after finding my passion for soccer/football again. Started out as a Barcelona fan back in the day since my uncle was a die hard and spent some time there. Kind of fell out of following the game after high school but recently found myself getting sucked back in after catching some Premier League games on NBC + all the Pulisic hype. Decided I'd give MLS a try since we now have a team that's actually in NY.

The main question I have though is the details of the DP contracts. To my knowledge, three players(DP's) can be signed for whatever salary figure the team wants to pay, but they'll only count towards the cap as $480K. Is this correct, or is there a limit on what a team can spend on a designated player?

Also, I know salaries are one thing, but is there a rule on transfer bids? For example there is a lot of talk about Coutinho being available for $60M or so, and if an MLS club decided to give it a shot is there anything preventing them from paying up that kind of money? Players like that wanting to come here is a different story, but in theory could a team offer up that kind of money for negotiating rights?

Lastly, is there any talk of this salary cap going way in the future? From what I've read, the game is growing and owners want to spend. I know the cap is resulting in a lot of roster turnover. Is there a chance that this goes away soon or does that depend on how/if the game continues to grow in the States?

Sorry for all the $$$ questions. Should be asking about where to sit - since I'm attending my first game towards the end of April and I'm not sure of the Yankee Stadium layout. Thanks for any responses and I look forward to talking NYCFC soccer with you!!

 

[gbservis]

First off, welcome! I'll take a shot at your questions.

The main question I have though is the details of the DP contracts. To my knowledge, three players(DP's) can be signed for whatever salary figure the team wants to pay, but they'll only count towards the cap as $480K. Is this correct, or is there a limit on what a team can spend on a designated player?

There is no limit on how much teams can spend on a DP or transfer fees. That said we have yet to see owners throwing around anywhere near the type of money coming out of china or what you are used to in the EPL. Most of the high profile DPs in the league are making in the 6M-10M range.

Also, the cap his is not always $480K, it's lower for players age 20-23 and even lower for players below 20 years old.

Also, I know salaries are one thing, but is there a rule on transfer bids? For example there is a lot of talk about Coutinho being available for $60M or so, and if an MLS club decided to give it a shot is there anything preventing them from paying up that kind of money? Players like that wanting to come here is a different story, but in theory could a team offer up that kind of money for negotiating rights?

For DPs there is no limit on transfer fees beyond what teams are willing to spend. For players below DP level the transfer fee is rolled into the cap hit.

Lastly, is there any talk of this salary cap going way in the future? From what I've read, the game is growing and owners want to spend. I know the cap is resulting in a lot of roster turnover. Is there a chance that this goes away soon or does that depend on how/if the game continues to grow in the States?

It's doubtful the cap will go away anytime soon. The league believes parity is key to it's success and wants to make sure they don't fail like the old NASL. You can search around the forums as there has been a bunch of good discussions about this in the past. It's complex but the issue is centered around more than just eliminating the cap. Each team is limited in the number of international players they can have on the roster. This is done for a number of reasons but mainly to ensure that the league is acting as a development mechanism to improve to over all talent level of American players. This is not unique to MLS and happens in most leagues across the world. Eliminating the cap would essentially result in dramatically inflated salaries for American players well beyond what they are worth with respect to the international market. The way the league gets around this is with the DP rule and now the new rules with TAM funds. Teams can spend big on top talent for a handful of spots but they are protected by the salary cap from getting in a bidding war and inflating the salaries of the lower level US starters and bench players they need to fill out their team.

 

[Gotham Gator]

Welcome to the forum and as a fan of the team! I hope you find each as much fun as we do.

Also, be careful asking about MLS salary rules. You are starting down a treacherous and winding path that never leads anywhere but obfuscation and confusion.

With that...

You are correct about DP salaries. A team can pay a DP as much as it would like, and it will only count $480K against the salary cap, which is the most you can pay someone who is not a DP without buying down their salary somehow (more on this below). Each team can have up to 3 DPs.

The other way a team can exceed the salary cap is by using "allocation money", which can include General Allocation Money (GAM) or Targeted Allocation Money (TAM). Teams trade TAM and GAM among themselves for various reasons.

Teams receive GAM for a lot of reasons (expansion teams, non-playoff teams, making Concacaf Champions League, fees received from selling players, etc.). Teams can use GAM for pretty much anything, including buying a player down below the maximum salary and just paying the team more than the salary cap.

Each team receives a fixed amount of TAM each year, which can generally be rolled forward if not used. TAM can only be used to compensate a player making more than $480K and less than $1 million and basically brings their salary down below the league maximum to a number that fits within the salary cap.​

Transfer fees count as part of a player's compensation, so they need to fit within the salary cap and/or be paid for with GAM or TAM. For most players, all of the transfer fee is counted against the season in which it is paid. For DPs, this doesn't matter since a team can pay them as much as they would like, so there is no limit on transfer fees. A team can also designate one player for whom transfer fees are amortized over the length of the contract. So, for a player signing a 4-year contract for whom the team paid a $400,000 transfer fee, you simply add $100,000 to his salary each year to figure out how much his budget charge is each season.

I don't see the salary cap going away anytime soon. While there are deeper pockets in the league these days, many of the original owners can't afford to compete on that basis, and the league still views competitive balance and financial health as very important. Plus, keeping a lid on salaries encourages the deeper pockets to spend in other ways, such as player development academies and stadiums. I think we will continue to see the amount that teams can spend on players increasing at a good rate, probably through mechanisms like increasing the amount of TAM that teams get, which adds higher quality guys in the "4-7 roster spots" - or the players just below the level of DP.

 

[Ryan D]

First off, welcome! I'll take a shot at your questions.



There is no limit on how much teams can spend on a DP or transfer fees. That said we have yet to see owners throwing around anywhere near the type of money coming out of china or what you are used to in the EPL. Most of the high profile DPs in the league are making in the 6M-10M range.

Also, the cap his is not always $480K, it's lower for players age 20-23 and even lower for players below 20 years old.



For DPs there is no limit on transfer fees beyond what teams are willing to spend. For players below DP level the transfer fee is rolled into the cap hit.



It's doubtful the cap will go away anytime soon. The league believes parity is key to it's success and wants to make sure they don't fail like the old NASL. You can search around the forums as there has been a bunch of good discussions about this in the past. It's complex but the issue is centered around more than just eliminating the cap. Each team is limited in the number of international players they can have on the roster. This is done for a number of reasons but mainly to ensure that the league is acting as a development mechanism to improve to over all talent level of American players. This is not unique to MLS and happens in most leagues across the world. Eliminating the cap would essentially result in dramatically inflated salaries for American players well beyond what they are worth with respect to the international market. The way the league gets around this is with the DP rule and now the new rules with TAM funds. Teams can spend big on top talent for a handful of spots but they are protected by the salary cap from getting in a bidding war and inflating the salaries of the lower level US starters and bench players they need to fill out their team.

Thanks for the response. That makes sense, and perhaps it is best to keep some sort of cap, but it would be nice to see the league at a point where guys like Pirlo and Moralez are just regular signings(although on the more expensive side), while the DPs are used on actual high end talent that are in their prime years and can be considered long-term core pieces. You'll still need your role players and American talent to fill the roster under the confines of the cap, but at the end of the day there is a nice balance there.

Even still though with the cap in place the way it is, it's nice to hear that the game is growing and the league is getting better and better. Will be interesting to see the natural evolution of the MLS up close. Looking forward to at least seeing it first hand with NYCFC.

 

[Ryan D]

Welcome to the forum and as a fan of the team! I hope you find each as much fun as we do.

Also, be careful asking about MLS salary rules. You are starting down a treacherous and winding path that never leads anywhere but obfuscation and confusion.

With that...

You are correct about DP salaries. A team can pay a DP as much as it would like, and it will only count $480K against the salary cap, which is the most you can pay someone who is not a DP without buying down their salary somehow (more on this below). Each team can have up to 3 DPs.

The other way a team can exceed the salary cap is by using "allocation money", which can include General Allocation Money (GAM) or Targeted Allocation Money (TAM). Teams trade TAM and GAM among themselves for various reasons.

Teams receive GAM for a lot of reasons (expansion teams, non-playoff teams, making Concacaf Champions League, fees received from selling players, etc.). Teams can use GAM for pretty much anything, including buying a player down below the maximum salary and just paying the team more than the salary cap.

Each team receives a fixed amount of TAM each year, which can generally be rolled forward if not used. TAM can only be used to compensate a player making more than $480K and less than $1 million and basically brings their salary down below the league maximum to a number that fits within the salary cap.​

Transfer fees count as part of a player's compensation, so they need to fit within the salary cap and/or be paid for with GAM or TAM. For most players, all of the transfer fee is counted against the season in which it is paid. For DPs, this doesn't matter since a team can pay them as much as they would like, so there is no limit on transfer fees. A team can also designate one player for whom transfer fees are amortized over the length of the contract. So, for a player signing a 4-year contract for whom the team paid a $400,000 transfer fee, you simply add $100,000 to his salary each year to figure out how much his budget charge is each season.

I don't see the salary cap going away anytime soon. While there are deeper pockets in the league these days, many of the original owners can't afford to compete on that basis, and the league still views competitive balance and financial health as very important. Plus, keeping a lid on salaries encourages the deeper pockets to spend in other ways, such as player development academies and stadiums. I think we will continue to see the amount that teams can spend on players increasing at a good rate, probably through mechanisms like increasing the amount of TAM that teams get, which adds higher quality guys in the "4-7 roster spots" - or the players just below the level of DP.

Thanks and glad to be here! Glad you brought up the player academies since that's another thing I was curious about. Are MLS teams strictly developing American/Canadian talent or are they signing European/South American kids as well? Is there a good source out there for keeping up on these kids? Are there any in the system now that appear to be future top guys? Thanks.

 

[Gotham Gator]

Thanks and glad to be here! Glad you brought up the player academies since that's another thing I was curious about. Are MLS teams strictly developing American/Canadian talent or are they signing European/South American kids as well? Is there a good source out there for keeping up on these kids? Are there any in the system now that appear to be future top guys? Thanks.

I think they have their hands full with the local American kids, but I don't know for sure.

We have a thread in the "Team News" forum about our academy, but I don't know about resources for others.

Like the Club itself, NYC's academy is fairly new, but we did have one guy train with the team in pre-season, and there was a fair amount of speculation that we would sign him.

 

[roxfontaine]

Welcome, Ryan! You definitely came to the right starting point.

 

[Falastur]

Thanks and glad to be here! Glad you brought up the player academies since that's another thing I was curious about. Are MLS teams strictly developing American/Canadian talent or are they signing European/South American kids as well? Is there a good source out there for keeping up on these kids? Are there any in the system now that appear to be future top guys? Thanks.

I suspect the question of teams developing foreign talent is a scenario the league has perhaps considered but never written an ironclad rule for, as I suspect that - outside of children of immigrant parents - it doesn't happen very often at all. There's a rule in MLS that teams aren't supposed to recruit kids outside of 90km from their home stadium (in order to avoid potential conflict over poaching from each other). On the odd occasion that it might happen then I suspect that MLS would be very quick to just consider the child to be part of a migrant family to avoid the headache, and they'll worry about codifying it once it actually happens frequently. That said, I suspect that if MLS academies ever got to the point where they could consistently recruit top foreign youths then, as long as they weren't seen to be ignoring their homegrown kids, the league would be very willing to encourage it.

What you have to bear in mind at present, though, is that if a child is willing to and capable of moving from his home country then he's definitely got some skill about him and so he is likely aiming for the stars already. European kids can barely move for the top academies around them anyway (many of the best ones are signed up to a PL academy before the age of 10), while South American kids will in all likelihood aim for Spain, Portugal and Italy, which all offer very generous terms on qualifying for citizenship as each country considers Latin Americans to be a diaspora of sorts of their own. That's important because once you have citizenship in any of those countries you are also an EU citizen and therefore can play in any and all of the top European leagues (Premier League possibly soon to be permitting) without restriction.

There likely aren't too many kids who want to move to the USA primarily to attend an academy unless their parents are also just as interested in the move for quality-of-life purposes - in which case the kid goes straight back into that "child of immigrant parents" category.

 

[Ryan D]

Haven't gotten a chance to check up again until now, just wanted to say thanks for the info everybody. Can't wait to dive in and hopefully learn a lot more as I follow the team.

 

[Gotham Gator]

Haven't gotten a chance to check up again until now, just wanted to say thanks for the info everybody. Can't wait to dive in and hopefully learn a lot more as I follow the team.

Good stuff. You going to the game today?

 

[Ryan D]

Good stuff. You going to the game today?

Unfortunately no - I think the plan is to go on the 23rd against Orlando. I did catch the game though on YES and got all pumped up. Fun team to watch. Looking forward to next weekend.