One of the tools at the Black and Red’s disposal to maintain the roster within the salary constraints is Allocation Money.
Allocation Money is the primary method of fitting higher-paid players into MLS’s modest salary cap structure. General Allocation Money (GAM) can be used to lower the cap hit of any player, whereas Targeted Allocation Money (TAM) can only be used to lower the cap hit of players who will receive more than the $504,375 Maximum Budget Charge to ensure they do not count as a Designated Player.
As announced a year ago, each team received $1.2 million in TAM for 2018 and will continue to receive the same amount for 2019; they had the option of spending all of the 2019 TAM in 2018. Additionally, each team could spend an additional $2.8 million per year in Discretionary TAM, although that amount would come directly out of the pockets of the team owner.
D.C. United used TAM on four players in 2018: Zoltan Stieber, Yamil Asad, Luciano Acosta and Steve Birnbaum.
Zoltan Stieber was re-signed from the 2017 season, and his nearly $1 million salary required at least $500K of TAM to bring his cap hit under lest he be considered a Designated Player. Asad was new to the team in 2018, also requiring TAM to buy down his contract. Similarly to the 2017 season, Acosta’s contract was again bought down with TAM in 2018; the same occurred with Steve Birnbaum after his loan was extended.
It appears D.C.’s strategy during the 2017-18 offseason was to acquire significant resources to both make up for the combined more than $4.4 million spent to transfer in Acosta after season-end in 2016 and Arriola and Stieber in 2017, and also to prepare for the acquisition of Asad and Rooney in 2018, adding star power to their roster.
Below is a listing of all transactions involving allocation money by D.C. since the end of the 2017 season, along with how many of the transactions affected the team. The official transaction text is quoted, if available.
End of 2017 Season – Received $250,000 in GAM because of not making the playoffs.
If there’s anything American sports are known for, it’s parity. The MLS SuperDraft is not the supply of talent other sports’ drafts are, so the league has to come up with additional solutions to bring up the level of the teams who didn’t make the cut.
End of 2017 Season – Received $450,000 in GAM for not having a third Designated Player.
Teams wishing to use a third Designated Player must pay a fee of $150,000, with the fee being waived if the player is a young DP (23 or younger). Twelve teams paid this fee, totaling $1,800,000. This money is then distributed to all teams who did not have a third DP, four in total, giving D.C. a sum of $450,000 in GAM.
Dec. 10, 2017 – Traded $75,000 in GAM and a 2018 International Roster Spot to New York City FC in exchange for Frédéric Brillant.
Brillant ended up playing the fifth-most minutes out of all D.C. players. A 2018 International Roster Spot was regained in the January trade with Portland.
Jan. 9, 2018 – “LA Galaxy trade $100,000 in General Allocation Money and $200,000 in Targeted Allocation Money to D.C. United for rights to midfielder Perry Kitchen.”
Kitchen used to be on a Homegrown Player contract with D.C., but following the 2015 season, the player and team couldn’t agree to a new contract. He ended up in Europe until the beginning of 2018; United maintained Kitchen’s rights when he left MLS, since they did not receive any transfer fee in the process. The Galaxy were required to negotiate with the D.C. management in order to receive those rights and be given the ability to complete the purchase of the occasional USMNT player.
Jan. 19, 2018 – Traded No. 3 Pick in SuperDraft to Los Angeles FC for $100,000 in GAM and $200,000 in TAM.
With this trade, D.C. gave away all but their late-round picks in the draft, having sent the second-round pick to Vancouver for goalkeeper David Ousted. With players falling that far in the draft rarely making the roster, many teams opt not to even exercise their picks in those rounds, so effectively the Black and Red traded their way out of the 2018 SuperDraft. In fact, the two players D.C. did end up picking in the fourth round didn’t make the roster for the season.
Jan. 23, 2018 – “Portland Timbers acquire the MLS Homegrown Player rights for midfielder Eryk Williamson from D.C. United in exchange for $100,000 General Allocation Money in 2018, $100,000 Targeted Allocation Money in 2019, a 2018 international spot and a natural second-round pick in the 2020 MLS SuperDraft.”
D.C. gained some additional budget and roster flexibility, with a SuperDraft pick thrown in for good measure, in order that Portland could bet on the future of USMNT U-20 player Eryk Williamson. For the 2018 season, Portland loaned him to their USL team and eventually to Portuguese side C.D. Santa Clara.
Feb. 6, 2018 – “United acquired $337,500 in Targeted Allocation Money (TAM) in exchange for $225,000 in General Allocation Money (GAM) from Toronto FC.”
This trade was the funny situation of trading money for money within the notoriously complex MLS team budget rules. Likely much of the TAM acquired was put towards acquiring the rights to Yamil Asad a week later, though this was the latest in a string of trades for allocation money.
Feb. 7, 2018 – Acquired Oniel Fisher from Seattle Sounders in exchange for $50,000 in GAM.
Though lost to a season-ending injury in September, Fisher filled the starting right back role for the team for every single game from mid-May to August.
Feb. 13, 2018 – Acquired MLS rights to Yamil Asad from Atlanta United FC in exchange for $200,000 in GAM and $100,000 in TAM in 2018, along with $100,000 in GAM and $100,000 in TAM in 2019. In addition, Atlanta will receive an additional $100,000 in GAM if Asad plays for D.C. in 2020.
The 2017 Atlanta star was in high enough demand for D.C. to pay a steep price just to acquire his MLS rights, without fully acquiring him from Velez Sarsfield.
And given Asad’s $520,000 salary, D.C. was forced to use somewhere around $15,000 in either TAM or GAM to buy him down under the $504,375 Maximum Budget Charge lest he be considered a Designated Player.
D.C. is most definitely trying to keep Asad for the next season after they declined the $700,000 purchase option from Velez Sarsfield, but they are dealing with cap concerns for 2019 and would like to spread out the transfer’s cap hit over several seasons.
It is very likely a long-term contract with the 24-year-old would be established if the transfer were completed or the loan extended, requiring the team to shell out the additional $100,000 in GAM to Atlanta come 2020.
March 1, 2018 – “Sporting Kansas City (MLS) receives $100,000 of General Allocation Money from D.C. United (MLS) in exchange for $140,000 of Targeted Allocation Money.”
The second “funny money” trade of the year for DC, albeit at a slightly worse TAM-for-GAM conversion rate than their previous such transaction.
March 2, 2018 – Traded $100,000 GAM and a 2019 International Roster Spot to Sporting Kansas City in exchange for a 2018 International Roster Spot.
Thus continued the trend of trading away GAM to help manage the 2018 roster.
July 12, 2018 – Traded Patrick Mullins to Columbus Crew for $150,000 in TAM
After Rooney was transferred to the club, Mullins was going to have an even harder time getting minutes than he did before the superstar arrived.
Aug. 8, 2018 – “United acquire Lithuanian defender Vytautas Andriuškevičius from Portland Timbers FC in exchange for $50,000 of Targeted Allocation Money.”
$50k in TAM isn’t much to pay in the grand scheme of things, and it’s a good thing too. Vytas didn’t see the field the rest of the year for DC, after only playing 21 minutes for Portland. The timing indicated a desire to get more competition at fullback after Fisher was lost due to injury.
Sept. 7, 2018 – Sent the Homegrown rights for Jean-Christophe Koffi to New York Red Bulls in exchange for $75,000 in GAM.
End of 2018 Season – Received $81,818 in GAM for not having a third Designated Player.
Similarly to the end of the 2017 season, the Red and Black did not have a third Designated Player, giving them a share in the “tax” received from the teams who did. Six teams paid this fee, totaling $900,000. This money received by each of the 11 teams without a third DP amounted to $81,818 in GAM.
Overall, from the end of the 2017 season to mid-December 2018, United netted $206,818 in GAM and $877,500 in TAM.
Given MLS does not publish exactly how much TAM was used to buy down contracts, we can only know within a range how much TAM is left out of their original $2.4 million for this next season. However, D.C.’s inability to purchase Asad up front from Velez Sarsfield, despite a middling total payroll of $9.7 million, indicates the significant spending over the past three years has put strain on the budget. D.C. may not be able to make significant moves this offseason beyond their recently-signed loan of Lucas Rodriguez, and there are rumors Stieber may need to be waived or transferred to make space on the balance sheet.
Overall, the budget situation looks challenging for the Black and Red, but they have a young and developing midfield full of star potential, giving the team hope for both a return on their investment and more shots at the playoffs. And now that Audi Field is built and into maintenance mode, the ownership might be willing to loosen their purse strings to keep those core players around for a while longer.
All player salary data was provided by the MLS Players’ Association’s 2018-2019 MLS Player Salary Report.
Ryan Anderson is a data-driven insights evangelist currently working as a data analyst in Des Moines, IA. He moonlights as a certified soccer referee and provides player projections and advice for the MLS Fantasy community via his Twitter account.