An announcement from MLS board of governors came down the inter-tubes today regarding the mysterious TAM, or Targeted Allocation Money. The amount from 2017 of $1.2 million is being continued (much to team manager’s delight).
However, the big news came in announcing that there will also be an additional $2.8 million in optional ‘discretionary’ TAM available for both 2018 and 2019. Exactly what makes this TAM ‘optional’ and ‘discretionary’ remains unknown by us mere fans.
Per the MLS announcement, TAM may be used in the following ways:
- In order to use TAM on a player, that player must earn more than the maximum budget charge ($480,625 in 2017) in annual salary. The compensation ceiling for such players is set at $1,000,000 per year, unless the TAM is being applied midseason to buy down the budget charge of an existing Designated Player.
- Clubs may use a portion or all of their available TAM to convert a Designated Player to a non-Designated Player by buying down his salary to at or below the DP threshold ($480,625 in 2017). If converted during the secondary transfer window, the DP in question may earn a maximum of $1.5 million on a prorated basis. If TAM 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 as a DP.
- Clubs retain flexibility to convert players previously bought down with TAM back into Designated Players if they have a free DP slot.
- 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.
This much of an infusion of cash into the league allows teams to sign more high quality players, as well as keep the best of those currently on the roster that may have had to be cut in the past due to salary cap constraints.
Of course the ‘optional’ part may serve to further separate team owners that haven’t wanted to spend. Time will tell how that will sort itself out.