Wednesday, July 8, 2015

MLS Announces New Targeted Allocation Money

Today the league announced a new source of funds for player acquisition and retention, Targeted Allocation Money.  You can read the link for more detail but essentially this is to encourage teams to go find players with a price (salary+transfer fee) in that $500K-$1M range.  Players like Torres for example.  Now as a Rapids fan I along with probably most of the readers of this thought "great, another asset the Rapids won't use" but the league seems to be serious about getting new players in the league and included a couple of provisions in the new rules that will help ...encourage... teams like Colorado.
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.
Or, a club could use the funds to buy down the salary budget charge of one of its existing Designated Players to below the maximum, provided the club then signs a Designated Player at an investment equal to or greater than the player being bought down.
Essentially what that means is that Colorado can't use the extra money just to buy down the contracts of Ramirez or Doyle without going out and signing another DP and they can't just sit on the money.  Really they have 3 choices with this money:

  • Go sign a new player with the funds or to free up the funds to buy down Ramirez/Doyle
  • Re-sign an existing non-DP to a DP contract
  • Trade the funds to another team who will use it on a player
The second option requires having a player worth turning into a DP, which we don't have at the moment, though another year or two and Powers might be there.  So that leaves signing a new player or trading the funds.  There's no rule in what they have to be traded for, so sadly the Rapids will probably trade them for a 3rd round Superdraft pick or Mehdi Ballouchy but at least they will be forced to do something with them.

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