The head of the MLS Players Union indicated he has mixed emotions about the league's introduction of more Targeted Allocation Money, or TAM.
TAM is basically a mechanism for reducing a player's hit on the salary cap. MLS announced earlier this week that it was giving each team an additional $800,000 of TAM to apply to player salaries during the 2016 season, and another $800,000 in 2017. This is on top of the $500,000 the league gave to teams last year.
TAM can be used in one of two ways. First, a club can use TAM to reduce a new signing's salary cap impact, provided they make above the Designated Player threshold of $457,500 per year, but less than $1 million. The same approach can be used with existing Designated Players so that they no longer count as a DP, so long as a team signs a new Designated Player in the process.
TAM is different from General Allocation Money, which can be used to reduce the cap hit of any player on its roster. All told, MLS will be increasing its investment in player salaries over the next two years by $32 million.
"We're certainly happy that MLS is spending more on players," said Bob Foose, the executive director of the MLSPU. "It's exactly what we always knew and always said that they needed to do."
But Foose said he finds the TAM system to be overly restrictive and complex in a way that is "unnecessary and frankly counterproductive."
"I think that the TAM funds should have simply been added to the salary budget and clubs should be allowed to spend them as they want to spend them within the context of how each club approaches building a team," he said. "At this point in the league it's just not necessary. I think it's counterproductive to be so micromanaged and so complex."
The league has made no secret of the fact that those funds will be concentrated on those players at the higher end of the MLS pay scale, with the intent being to increase overall player quality. The salary budget, which next year will be $3.66 million per team, still has to be spread out among 20 senior roster players. (Teams are allowed a maximum of 28 players, but the salaries of the last eight players don't count against the salary cap.)
But now, a player making $200,000 can be replaced by a player making $700,000 whose cap hit can be reduced to $200,000 by using $500,000 in TAM funds. But Foose sees the influx of cash as having a ripple effect throughout a team's roster.
"Despite the way it's explained, this money isn't limited solely to players above a certain salary level because it allows for buying a player's salary down," he said. "And it also means that other allocation dollars and other budget dollars that might have been spent on players at that level can now be spent on players below the level."
As for whether the "middle class" players will now see their salaries get squeezed, Foose looks at that concern as being outweighed by the positive consequence of more money being pumped into the system.
"The reality is that some players in that process will be replaced by higher-priced players, that's sports," he said. "That's no different than it is anywhere. If we were to take an extreme example, if MLS were to decide tomorrow to implement a $12 million salary budget, there would be guys who would lose their jobs. But guys understand that. What they want is to be paid what they're worth."
Asked if the increase in TAM funds make that harder or easier, Foose responded: "It makes it easier because it's more money, but it doesn't make it as easy as it should because of this lack of transparency and this convoluted process and this over-management.
"Fundamentally, it's time to trust the teams. The teams know what they're doing. Dictating to them how they do it for one, it implies that there is one size that fits all, which I think is just wrong.
"Secondly, teams don't have as much opportunity to try different ways of constructing teams to figure out which is the best way. They're trying to lock teams into a common system and I don't believe that's the best way."