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RSL 101: What is the MLS Allocation System? Understanding the Intricacies of the League

New to Real Salt Lake, Major League Soccer, or simply need a refresher course? We're breaking down some key elements of the league and the club in this series. Now up: What is the MLS Allocation System?

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With Major League Soccer's 20th season just around the corner, we here at RSL Soapbox attempt to explore and explain the intricacies of the league.  In this article we will discuss the allocation process and the mechanisms guiding it.  The goal is to allow fans to have a greater understanding of how the MLS systems works and act as a future reference if situations arise concerning Real Salt Lake.

So you must have heard by now that Major League Soccer is not exactly like every other soccer league in the world.  While this can make for an interesting story it can also be a hassle to understand.  Among the most confusing aspects of the league is the mysterious "allocation" system.  This system is governed by two mechanisms that are equally perplexing:  allocation order and allocation money.

No doubt you have heard the term "allocation," but what is it?  In the simplest terms, allocation is the process through which players are acquired by a club in the MLS.  As players in the MLS have a contract with the league and not individual clubs, allocation helps decide where players will play.  The process consists of the two aforementioned mechanisms that we will discuss (to the best of our ability) in order to help you further understand.

Allocation Order

The allocation order is a ranking system by which the league determines which club has first priority to a player's acquisition.  This order usually pertains to U.S. National Team players or former MLS players who have previously played abroad in a transaction that involved a transfer fee.  This order, however, is also applicable when requests regarding a single player is filed by two or more clubs on the same day.

In other words, it is an order list of clubs who have the option of calling "dibs" on a player before the teams after them can.

The allocation order is used to establish parity.  Unlike other leagues in the world, the payroll of clubs in the MLS has very little to no correlation with how well it preforms.  The allocation order is partially responsible for this.  Allowing smaller market and struggling clubs a change at bringing in quality players - or at least putting them in a position to make a beneficial trade.

At all times, each club is assigned only one ranking.  Every year, after the MLS Cup, the order is reset reversing the previous season's standings.  The rankings can be traded or skipped, but once a club exercises its option in the allocation order, it's ranking drops to the bottom of the list.  As of today, RSL sits in the eleventh spot after several trades involving allocation order have already occurred in 2015.

For up to the date information regarding the allocation order check:

The importance of the allocation order cannot be understated after the Jermaine Jones debacle of 2014.  As part of the U.S. Men's National Team, Jones decided to come to the MLS and signed a contract with the league - a result of the single entity structure.  Long story short, two clubs were in the running for his services and through surreptitious processes, also known as the Lottery Allocation mechanism - that have been otherwise re undisclosed to the public - was gifted to New England.

Like Alice, smaller clubs' request for players would fall down the rabbit hole to Wonderland leaving them dreaming of what could have been, while aspiring North American giants like LA Galaxy, Seattle Sounders, and Toronto FC sweep in to collect the prize.  This was the straw that broke the camel's back - after Clint Dempsey and Michael Bradley bypassed the allocation system entirely, sparking a lively debate over the process by which U.S. National Team members enter the league.

This saw the Lottery Allocation mechanism disbanded, as the MLS officially announced it was going back to using only the allocation order in 2015 to determine the fate of applicable incoming players - hopefully ushering in an era of greater transparency.  While the rules have larger reaching effects than just the procurement of U.S. internationals, it is a major component to the player acquisition system on a whole.

Allocation Money

The Bitcoin of the Major League Soccer world.  You hear about it being used and the league acknowledges its existence, but no one knows how much of it is in circulation.  This enigmatic currency, in plainest of terms, is used to buy down the salary cap of a player either newly entering the league or signing a new contract.

A club acquires allocation money through several methods.  The most common that is publicized is through trades with other clubs.  According to the MLS, a team must trade no less than $75,000 dollars in a single transaction, but official confirmation of exact amounts are withheld (unsuspiciously of course).  Other acquisition methods include, but are not limited to, receiving a transfer fee for from a player who leaves the league, qualifying for and competing in tournaments (such as the Open Cup and CONCACAF Champions League), missing the playoffs (in regards to preserving parity), or being an expansion team.

This is the magical substance that is most likely responsible for opening up the third Designated Player slot for the Claret-and-Cobalt.  After signing Sebastian Jaime to a DP contract, RSL looked to have filled all three DP spots on their roster after Alvaro Saborio and Javier Morales.  However, Dell Loy Hansen announced just a little over a week ago that RSL had another DP slot to use.  While the actual mechanisms behind this announcement remain a mystery, we can assume it was likely the result of the allocation money we received from the trades involving Nat Borchers and Sebastian Velasquez.

Why have this weird system?

I guess it makes sense . . . well, kind of . . . um, maybe.  Still, there is no concrete way of determining the results of the allocation system.  Through the clandestine transactions of the allocation rankings, to the mafia style embezzling accounting of the allocation money mechanism - ironically, a system that would thrive in Vegas, despite recently being turned down by the league as an expansion site - what would happen if someone like Tim Howard attempted to join the MLS would be anyone's guess.

For Real Salt Lake - and other small market teams - this system is both a curse and a blessing.  Sure the allocation system allows small market teams to acquire World Class talent, but only if the team has struggled.  With the current RSL playoff streak at seven consecutive years, it does not look as if RSL will be anywhere near the top of the allocation order for a while.  Furthermore, to trade up would certainly almost be draining as the club operates on such a meagre budget.

For example, the Philadelphia Union acquired the "rights" to Maurice Edu for $1.2 million.  Let me put this in another way.  Edu, barely an all-star caliber player, was purchased for 400 percent more than Kyle Beckerman makes in a year.  In essence, by determining a player's location through a combination of who wants them and how poor that club is doing, a team could work their way into landing a big name player from overseas instead of investing in domestic talent - i.e., paying them a competitive salary.  So now can you see why free agency is shaping up to be such a big deal in the current CBA negotiations?


So, with little resolved and probably more questions than answers, there is a brief sneak peek behind the curtained world of the MLS.  Unlike any other league in the world, MLS will continue to be an enigma.

As always, let me know what you think and I'll do my best to answer questions in the comments. I hope this has helped further your understanding of MLS' system and it didn't give you too big of a headache.

As always, we'd like to know what you think.  We'll do our best to answer any questions or comments.  Do you think that there is a characteristic of the MLS allocation system that we missed?  Are there other allocation mechanisms in the MLS that we overlooked?  What do you think makes this system unique/weird and how could it be improved?  How does the current structure bode for the future of RSL? Share your opinions in the comments section below.