Final 2023 salary release
Roster Sudoku; salary comparisons; cap compliance; guessing games
As they do twice per year, this week the MLS Players’ Association (“MLSPA”) released the latest batch of player salaries following the 2023 roster freeze date on the 15th of September. (*11 air horn sfx hits in a row*)
This post will be a discussion of the final salary position for this 2023 vintage of the Sounders — using the clues in the salary release to map out which roster mechanism is allocated to each player — and also a little math to determine whether the Sounders are cap compliant when we take those roster mechanisms’ effects into account. I have tried my best to show my work, so I hope this is useful if you’re into this type of thing.
By way of very brief context, the MLS roster rules are governed by the Collective Bargaining Agreement (“CBA”), which is a contract negotiated between the MLS owners and the MLSPA on irregular basis. You can read all about these rules in the CBA, or take a look through a really long MLS roster rules overview post from earlier this year which hopefully provides relevant background for this post.
Who got a raise?
Below are the latest salary numbers, with a comparison to their numbers from the fall salary dump last year.
From all the green in the column on the right (“%Δ”), it’s obvious that there has been upward movement in guaranteed compensation across the board, which is probably due to (1) built-in increases in player contracts that are meant to grow as the salary cap grows, and (2) performance bonuses achieved by winning Concacaf Champions League last season. We can’t know exactly what mechanisms caused these jumps, but whatever they were, 24 of the 28 Sounders on the roster are making more than they did last season and 14 of those 24 players received a substantial increase (i.e. 20%+) in guaranteed salary¹.
In the “%Δ” column in Fig.1 above, one sees some hefty increases there. As such, one might think the overall spend of the Sounders grew substantially from 2022 to 2023. One would be right about that. The Sounders overall spend went from $16,983,746 in 2022 to over $19,000,000 in 2023, an increase of approximately 13.75% in total liabilities. This substantially outpaces the built-in total cap increase (i.e. cap + TAM + GAM²) allowed by the CBA of approximately 5.14% by quite a bit.
At this point, one might be thinking, hey! Where did all this cap space come from? How can the Sounders add an additional 10% salary obligation on top of an already maxed-out budget charge from 2022 if the total cap limit only increased by 5.14%? (!!). And one would be right to ask that question, because it’s not clear! I will go more detail on this point below, but for now, suffice it to say that we’re missing important bits of information.
Roster construction — How to cram it all in there
Below in Fig.2 is a roster template for MLS in 2023, showing the various categories to which players can be allocated. Each team gets 20 senior roster spots, four supplemental roster spots, four reserve roster spots, plus an additional two reserve roster spots that are subject to slightly different rules than the first four reserve spots. Again, more info about these specific roster categories can be found here.
The Sounders very helpfully list which categories each of their players fall into on their official website. That said, rather unhelpfully, they also list them incorrectly. According to them, six players currently occupy Supplemental Roster spots 25–28 (very clearly not 6 spots available there), and only two listed for spots 21–24. Additionally, they also list Xavier Arreaga as a current international player, which he hasn’t been for over 18 months. As such, I don’t think we should trust the website. Instead, like good Cartesians, we’ll doubt everything until we can verify it.
To do this, we have to work backwards from the numbers we’re given by the MLSPA (here we find our foundation, ergo sum, etc) and try to fit them into the roster categories the best we can using the eligibility criteria for occupying those spots. It’s a bit of a Sudoku process, so if you want to follow my method of educated guessing, bear with me and I’ll do my best to explain my process; if you don’t, just skip to the end for the final result.
Supplemental / reserve roster
Players allocated to the supplemental roster (including reserve roster spots) and their respective budget charges do not count against the cap. Because the goal of all MLS roster construction is to move as much of the total spend off cap as possible, it makes sense to fill up these supplemental and reserve rosters with the biggest salaries possible before allocating anyone to the senior roster (where salaries count dollar-for-dollar against the cap) in order to minimize the overall team cap hit.
A. Supplemental roster (slots 21–24)
Right off the bat, it’s easiest — at least with this crop of players — to start with roster slots 21–24. The criteria for eligibility for a non-reserve supplemental roster slot is that the player must (1) make at least the senior minimum salary for 2023 ($87,444), and (2) be one of (a) a homegrown player (“HGP”), (b) subject to the HGP subsidy, (c) a Generation Adidas (“GA”) player, and/or (d) an MLS Superdraftee.
There are, conveniently, four players on the squad who meet these criteria, and they are:
- Ethan Dobbelaere — HGP ($118,000)
- Reed Baker-Whiting — HGP ($105,444)
- Jackson Ragen — Superdratee ($85,444)
- Paul Rothrock — Superdraftee ($85,444)
Since there are only four³ roster slots available, the analysis is pretty easy. It is Dobbelaere, Baker-Whiting, Ragen and Rothrock that can get penciled in, representing $394,332 in salary liabilities being shifted off the cap. If more than four players had met this criteria, we would have allocated the most expensive ones to these spots to move as much salary budget off cap as possible, leaving the cheaper ones to fall to the senior roster where the salaries count against the cap.
B. Reserve roster (slots 25–28) & reserve roster (slots 29 & 30)
To qualify for the reserve class of roster spots 25–28, a player must make between the reserve minimum ($67,360) and senior minimum ($85,444) salary levels. There are six players on the Sounders that fit this criterion (Cody Baker — $73,064, Jacob Castro — $67,360; Stuart Hawkins — $79,381, Sota Kitahara — $69,860; Dylan Teves — $68,775; and Obed Vargas — $76,392). Furthermore, all of these players are HGPs, meaning they all meet the second criterion for slots 25–28, so we could just write any four of the six in immediately.
The rules are the same for slots 29 and 30, with two exceptions. First, to be allocated to these spots, the player must be a HGP; no Superdraftees or Generation adidas (“GA”) players allowed. Second, these spots do not have a maximum salary restriction like spots 25–28 do, so it makes sense to allocate the two most expensive HGPs to slots 29 and 30 first in order to move as much off cap as possible. Accordingly, I have allocated Obed Vargas ($76,392) and Stewart Hawkins ($79,381), the two most expensive of the eligible players⁴, for a total shifting of $155,773 off the cap hit from the final two spots. Together with the $279,059 from slots 25–28, that makes for a reserve roster shifting of $434,832 from the reserve spots.
At this point, it should be noted that Sounders most expensive HGP, who would be the best option to fill one of these last two reserve roster spots, is Danny Leyva. However, since Leyva was sent on loan for the remainder of the season with Colorado Rapids, and consequently his salary has been partially offset by a distribution of GAM received from the other direction (more on this later), we can exclude Leyva from the analysis for now⁵ and pencil Vargas and Hawkins in to the final two reserve roster slots.
So, finally, we have a fully-stocked supplemental roster (i.e. spots 21–30), and it represents a total off-shift of $829,164 in salary liabilities from hitting the cap.
Senior roster
Building out the senior roster is a piece of cake compared to the supplemental and reserve rosters. To populate the senior roster, you just list everyone else on the team once the supplemental and reserve rosters are finished.
The basic rule is that anyone not on the supplemental roster who is on first team contracts goes up there and all of their salaries count dollar-for-dollar against the cap. But there are a few well-known exceptions and mechanisms for shifting senior roster player salary off cap. Each are discussed below.
a. Designated Players
The Designated Player (“DP”) rule allows teams to shift all of a player’s salary budget that is above the maximum senior cap hit (i.e. 12.5% of the total salary budget for the year) off of the cap. The total salary budget for the season in 2023 is $5,210,000. 12.5% of that is $651,250 (max senior cap hit). Nicolás Lodeiro, is due $3,256,667 in salary 2023 and is Sounders’ most expensive player. The first $651,250 of that is Lodeiro’s cap hit. The amount above that $651,250 threshold — fully 80% of his salary — is moved off cap because the Sounders have made Lodeiro a DP.
Teams can only use three DPs designations at once. In addition to Lodeiro, Sounders have chosen to use them on Raúl Ruidíaz ($3,201,120) and Albert Rusnák ($1,871,667), who are the Sounders’ three most expensive players. This is not a coincidence; it’s only logical to use this roster mechanism on the most expensive players to maximize the amount of salary being moved off cap.
Using the DP slots on these three players means that Sounders can shift $6,375,704 off the cap. For the Sounders, the DP rule allows for the most substantial shifting of total spend off the cap of any of the roster mechanisms in the MLS rulebook.
b. U22 Initiative
There is one U22 Initiative player on the Sounders 2023 roster, Léo Chú.
Chú is guaranteed $550,000 for the 2023 season, but because he qualifies for the U22 Initiative roster mechanism, everything over $200,000 (i.e. $350,000) is shifted off cap.
c. Targeted Allocation Money (“TAM”)-level players
The Sounders have six players who are over the max senior roster cap hit threshold ($651,250), but under the max TAM threshold ($1,651,250). Provided their team does not use a DP designation on them, players making salaries in this range are by definition TAM-level players. The six players on Sounders 2023 roster that are in this salary range are listed below.
Because they’re TAM players, the team has to figure out how to buy down their cap hit below the max senior salary threshold ($651,250 for 2023). For example, Jordan Morris is scheduled to make $1,560,000. That is $908,750 over the max senior roster cap hit threshold ($651,250). Therefore, Morris’ cap hit is $651,250, but the team is required to budget an an additional 908,750 in allocation money in order to comply with MLS roster rules. The team can use GAM or TAM to buy down contracts like this, but because TAM can only be used to buy down TAM players’ cap hits (it cannot, for example, be used to buy down a normal senior roster player’s budget charge like GAM can), it makes sense to use all the TAM on these players first, and use the GAM later as necessary.
That said, we should also be aware that clause 10.10 (xvi)(e) of the CBA states that teams cannot “commingle” GAM and TAM to buy down the budget charge of a single player. In other worse, teams have to use either TAM or GAM for each player.
The 2023 TAM allocation available to each team is $2,720,000. Assume, for a minute, that the Sounders used their 2023 TAM on the salaries of Arreaga, Yeimar, João Paulo, Morris, and C. Roldan, for a total TAM usage of $2,619,903. This is the most likely scenario, because it’s the most efficient usage of the TAM. No other combination of these players’ salaries gets closer to full TAM utilization for the year. And if this is the case, it would mean that Héber’s contract would have to be bought down using GAM only (because TAM and GAM cannot be commingled), resulting in TAM 100,097 being left unutilized this season and likely rolled to next season.
But this is where the waters get very muddy, because everything I wrote above could be wrong. We just don’t know! It’s possible, for example, that the Sounders actually do have the TAM to cover the additional $367,750 above the max senior salary required to cater for Héber’s contract. There are a lot of ways that this could work. For example, the Sounders could have some leftover TAM from previous seasons which they were allowed to roll at a 1:1 value (or maybe some lesser fraction) into this season. They could have traded something for additional TAM that wasn’t disclosed to the public. Jordan Morris’ status as a homegrown player could allow for a percentage reduction to his cap hit or TAM cost that we are unaware of, or perhaps a mystery TAM allocation accounts for the disparity (“HGP subsidy”, anyone?). MLS reserves the right to adjust individual salary hits down in their “sole discretion”, so that is also a possibility. The league could also have increased the amount of TAM given to teams per year without announcing it. And, of course, the Sounders could be cheating (not likely). Etc etc etc.
If it is the case that they have enough TAM to cover all their TAM-level players, that would mean no GAM at all would be required to cover any TAM-level player this season, and instead could be used later to do the team-wide buydown to bring the sum of all cap hits under the cap limit.
However it works, it seems to work, so with imperfect information, I think the best way to deal with this is to just assume that the amount of TAM the Sounders have at their disposal perfectly corresponds to the amount the cumulative guaranteed salaries of the TAM players exceeds the max senior roster salary threshold. In other words, we just assume the Sounders have exactly TAM 2,987,653 to use, and that it perfectly offsets the requirements to be roster compliant, netting out at exactly $0.00.
I am open for better suggestions, but until I get one, I’m going forward with this.
d. Loaned players
Sounders currently have two players loaned out, Danny Leyva (as noted above) and Andrew Thomas. Both have been loaned for the remainder of the 2023 season.
Leyva was loaned in the winter window, so normally I would usually assume his entire salary is on Colorado’s books for the year. However, it was reported at the time that the compensation the Rapids paid for the loan was GAM 92,000, which was an amount targeted to offset Leyva’s remaining prorated contract for the year. Consequently, we can get Leyva’s cap hit to Sounders by subtracting that $92,000 from his guaranteed salary for the year ($224,900), hence the cap hit here of $132,900 for him. Thomas was loaned in the summer window, so the assumption is that Sounders are on the hook for 50% of his guaranteed salary. In all, Sounders are likely paying around $200,000 for two guys who aren’t available for selection but are getting the opportunity to get minutes they might not otherwise get.
e. Normal dudes
Finally, we can introduce the eight players that do not have any special roster mechanisms applied to them. These eight contracts count dollar-for-dollar against the cap and none of their cap hits are or can be moved off the Sounders’ liabilities for 2023.
These eight players’ salaries represent a cap hit of $2,449,081, or approximately 78.7% of the total salary cap hit.
Cap analysis
The Sounders currently have 30 players in their squad, but as you remember from the above, Leyva and Thomas are on loan assignments and consequently are not taking up any of the Sounders’ allocated roster spots. As discussed already, I have assumed that Sounders filled up the supplemental roster before allocating anyone to the senior roster in order to maximize the total spend they are able to move off cap.
Taking these into account, as well as the roster rules, the final roster allocation graphic as best as I can reconstruct it is represented below in Fig.3.
Before we can assess the various cap ramifications of the roster allocations, a quick overview of the GAM situation.
The cap allowance for 2023 ($5,210,000) plus the xAM allocation for 2023 (GAM1,900,000 + TAM2,720,000) is a total of $9,830,000. If we assume we’ve zeroed out the TAM number as discussed above, that leaves us with $7,110,000, but we also have yet to account for the other GAM allocations, acquisitions and outlays. These are outlined below.
The Sounders have $3,092,000 in GAM to spend this season, based on my best efforts in tracking the various transactions that have occurred. Again, these are not failsafe because as a starting point we don’t even know if the league has changed the levels in GAM allocation from the 2023 levels originally published in the CBA in 2020 (which they have the right to do), nor do we know if all transactions have been reported to the public. In any case, that’s the right number (pretty sure) based on the information we have.
Finally, since we have already subtracted the GAM 92,000 from Leyva’s salary cap hit, that amount is already used up, and consequently we need to adjust it down to GAM level to $3,000,000 to avoid double counting.
Cap compliant? Probably.
With all this in mind, and assuming all the TAM is netted to 0, the starting place for calculating the Sounders’ total cap budget for the 2023 season should be the sum of their GAM (i.e. 3,000,000) plus $5,210,000 in cap allocation (i.e. a total of $8,210,000).
In Fig.4 below, I have tried to distinguish which roster categories each player represents with different colors. The players in green are the supplemental roster players. All of their cumulative salaries are shifted off cap because of their status as supplemental roster players. The players in red (DPs) and blue (U22 Initiative) hit the cap only at the max threshold for their roster categories ($651,250 and $200,000, respectively). All of the rest of these players’ guaranteed salaries are shifted as well. Finally the TAM players are in yellow (showing their max senior cap hits plus the offsetting TAM amount used) and the loaned players are in grey (showing their reduced cap hits). I have Héber listed in a slightly different color yellow, to remind me that it’s possible his overage is bought down with GAM as opposed to TAM.
When you add up the cap hit of all players, after first subtracting all supplemental roster salaries, the amount in excess of the max senior roster threshold for DPs and TAM players, the amount in excess of the max U22 Initiative salary for Chú’s salary, and reduce the salaries for the two loaned players, the final cap liabilities for the Sounders is $8,600,081 for the 2023 season (see the intersection of row “total” and column “cap hit” in Fig.4 above).
Based on the numbers we have, Sounders have have $8,709,481 in cap liabilities but only $8,210,000 in cap space + 2023 GAM, which is a shortfall of $499,481 when offset by the total cap liabilities. That amount, in my estimation, is within the margin of error I’d allow for this exercise, especially considering the lack of transparency around TAM, the loan situations for Leyva and Thomas, and MLS’ general ability to do whatever it wants whenever it suits them when it comes to players’ salary budget charges. At the very least I don’t think this means anything fishy is happening on the Sounders’ side; no cooking the books or creative accounting. I think it just means there’s information that has not been made available to the public that explains how the shortfall is bridged over.
Is there anything else?
Yes, just a few random things I didn’t know where else to discuss.
Widespread use of roster mechanisms
A quick note on the Sounders’ roster build based on all of the above: I think its worth at least recognizing that the team is able to shift $10.7 million in salary total spend off their cap hit. That is around 55% of their total spend. Of course you could argue that a garbage team with 20 minimum salary players and one $50,000,000 DP would be even more efficient based on this way evaluating, and you’d certainly be correct in that. But the Sounders haven’t done it that way. And while I have nits to pick with regard to certain of the Sounders’ moves over the past couple years, when you take a step back and look at their roster construction overall, they have leveraged all of their roster mechanisms pretty efficiently, allowing them to spread off-cap shifting of salaries across 22 of their 30 player contracts, and have not been overly reliant on any one mechanism. It’s clear that the Sounders are attempting to get value added with each of the cap shift mechanisms available to them.
That said, a roster shake up is coming end of this year whether anyone’s ready for it or not (plenty more posts on this to come, I’m sure). By my count 13 of the 30 players on the squad have contracts or 1-year option terms expiring, including two DPs and four TAM players.
Wheels within wheels
The public release of the salary numbers — while always interesting and a never-ending source of #content for the league — is getting less and less useful as ever more mechanisms for funny business are introduced. The more alternative currencies and diminishing value credits and U22 Initiative concepts and HGP Subsidies that exist, the harder it gets for fans to have any expectations about what the team they love can / may / should do. Without expectations, you don’t get upsets, you don’t get dynasties, you don’t get favorites choking or underdogs overcoming, or legends that live up to the billing. And without those things, what is the purpose of sports? Instead, you’re left without any sense of history as each week teams’ horizons expand or contract with each result, and each year a new set of replacement level players churn through. It’s both exhausting and devoid of context, making it nearly impossible to develop any true affinity or loyalties.
These types of analyses are important precisely because fans should at the very least have the basic facts to help them evaluate how their teams are performing.
Alright, I’ve thoroughly gone outside the scope of what I meant to write about originally. If you made it through all of this, congratulations, your MLS sicko card is in the mail.
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Notes
¹ These counts exclude the salaries of Cody Baker, Stuart Hawkins and Paul Rothrock because they were not on first team contracts last season and therefore can’t be compared.
² Obviously, cap + GAM + TAM is not exactly the same as the equivalent amount in cap space only. This is due to the limitations for what these various mechanisms can be used for. But for the sake of simplicity we will treat it that way for these calculations.
³ Usually this eligible players list could potentially include Andrew Thomas ($132,000), who was also a Superdraftee, however since he is on a half-year loan to New Mexico United, I have assumed that Sounders are on the hook for only 50% of his salary cap hit this season, so his salary number is smaller than the others eligible players (meaning his cap hit is less burdensome), so I have allocated his remaining salary obligation to the senior roster.
Abdelouaye Cissoko meets the salary criterion at his 2023 number ($87,444), but he is not a HGP or a Superdraftee, so does not qualify and consequently allocated to the senior roster.
⁴ It makes no difference in this scenario, since all the remaining six players make below the senior minimum salary. This means that all six players eligible for the reserve roster made between the reserve minimum and senior minimum and were HGPs, so all could be in any order. Had, for example, any of these players made more than the senior minimum, however, they wouldbe ineligible for slots 25–28, and should be allocated to slots 29 or 30, since there is no maximum salary amounts applicable to those slots.
⁵ It was reported at the time that both clubs — Colorado and Seattle — had the right to terminate Leyva’s loan during the summer. It’s interesting to think about what would have happened had it been cut short. In that case, I suspect it would have meant that signing one, two, or all three of Cody Baker, Paul Rothrock, and Stuart Hawkins would not have been possible in 2023 due to cap restrictions.
