Major League Soccer added a new rule on Wednesday that opens the door for clubs to add more "high-earning" players.
MLS teams will be able to spend up to $500,000 on new players this season outside of their normal salary budget of $3.49 million, the league announced. These extra funds, or "targeted allocation money" in MLS parlance, will allow some clubs to add the equivalent of more high-earning players.
MLS clubs are limited to three designated players per team, but targeted allocation money will give teams added flexibility by allowing them to buy down the contracts of existing DPs.
The new rule opens the door for a club such as LA Galaxy to pay Omar Gonzalez's cap hit with these funds to get below the DP threshold, then add another big earner, such as Mexican national team star Giovani dos Santos, who is reportedly in advanced discussions with the club.
"When we took a step back and we looked at our rosters and the way in which our teams put them together, we realized that while we've been making substantial investment in a number of areas -- designated players, youth academies, increased salary budget, etc -- one area we felt we needed to drive even more investment toward is players who are making high-level salaries that are going to be difference makers on the field," said Todd Durbin, MLS vice president of competition and player relations.
Each MLS club will receive $100,000 per year for the next five years ($500,000 total) in additional funds to invest in their roster outside of the player salary budget.
These funds are in accordance with the new collective bargaining agreement that was concluded prior to the start of the 2015 season and are available to the clubs beginning on July 8 and concurrent with the opening of the secondary transfer window, the league said on Wednesday.
Similar to general allocation money, targeted allocation money may be used to sign new or re-sign existing players. The funds may also be traded, the league said.
Unlike general allocation money, which may be used to sign players earning any amount, targeted allocation money may only be used to sign or re-sign players who earn more than the maximum salary budget charge (but who are not DPs), the league said.
"For 2015, the maximum salary budget charge amount is $436,250. Importantly, unlike designated players for which a club is responsible for any payments above the maximum salary budget charge, all clubs will be provided the same amount of targeted allocation money through the League budget. As a result, all clubs will have the same opportunity to benefit from these new funds," the league said via statement.
The funds can be used in a single season on up to three players at a time, the league said.
"For example, if a club wishes to sign a player at or above the maximum salary budget charge this season, that club may use up to $500,000 of their targeted allocation money this year to acquire him. Additionally, going forward clubs may use a portion or all of their allotted targeted allocation money to convert a designated player to a non-designated player by buying down, on a prorated basis, his salary budget charge to at or below the maximum salary budget charge. 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."
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, the league said.