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MLS Increases TAM, Homegown incentive

MLS raises targeted allocation money while also handing out money for signing Homegrown players.

Tyler is excited for more TAM. Are you?
Tyler is excited for more TAM. Are you?
Kevin Jairaj-USA TODAY Sports

Wednesday, Major League Soccer announced that each club would receive an additional $800,000 in Targeted Allocation Money for the 2016 season and an additional $800,000 for the 2017 season. Previously teams received just $500,000 in TAM. This additional $300,000 will help teams to add depth to their rosters by using the money on players who make more than the 2016 maximum budget charge of $457,500.

Of course it comes with restrictions:

- Clubs may use a portion of or all of the available Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down his salary budget charge to at or below the maximum salary budget charge. If converted during the Secondary Transfer Window, the Designated Player may earn at maximum $1.5 million on a prorated basis. 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.

- Clubs retain the flexibility to convert players bought down with Targeted Allocation Money into Designated Players if they have a free Designated Player 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. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.

- A Player must earn more than $457,500 per year (2016 maximum budget charge) to qualify for Targeted Allocation Money. The compensation ceiling for such players is set at $1,000,000 per year, unless amounts are applied midseason to an existing Designated Player adjustment to Targeted Allocation. The minimum budget charge for a player compensated with Targeted Allocation Money is $150,000.

The league isn't just investing more money in targeted allocation but also adding an incremental $125,000 per season for clubs who sign Homegrown Players. As the Academy system has grown league wide MLS wants to make sure that those players still have a change to make it to the top flight clubs.

So, MLS is adding money so that clubs can bring in higher dollar players while dangling extra money for those who invest in Homegrown youth. How very MLS of it.