MLS commissioner Don Garber confirmed during Friday's State of the League address that the league has provided teams with an additional $400,000 of targeted allocation money (TAM) for next season, pushing the total for each team to $1.2 million.
The increase was first reported by Sports Illustrated.
"The investment that we've made in what we call TAM, supporting and improving the middle of our rosters across 2016 and the growth in 2017 will go up $33 million," said Garber.
"That's a massive amount of money that we've invested over that two-year period in this program."
TAM allows teams to reduce the salary budget hit of players making more than the Designated Player threshold. It can be used as an aid in signing players already on the roster, as well as new players. And it is intended to allow teams to bring in high-salaried players beyond those occupying the maximum three DP spots.
Last season, the salary budget for the first 20 players on a 28-player MLS roster was $3.66 million. The remaining eight players do not count towards a team's salary budget. The DP salary threshold in 2016 was $457,500.