Real sicko hours /// All the shit about MLS rosters you want to know but were afraid to ask /// Sounders salaries
The MLSPA released its Spring / Summer 2023 salary guide a few days ago, and that is the type of phenomenon that sits at the exact center of the overlapping Venn Diagram circles of this blog, so I’m sure you’ll forgive me going a little nuts with this post.
I’m going to start with a very long introduction to MLS’ Rube Goldbergian roster construction rules. I’ll try to talk about them in normal words. Hopefully this discussion provides context and helps your understanding of league roster mechanisms, and will also allow me to just refer back to this post every time the new salary figures get released in the future for all the technical throat clearing, leaving me to just stick to the new info.
Once all that stuff is out of the way, I’ll be in a better place to explain where the Sounders are in their roster construction.
Collective bargaining
The roster and remuneration rules that govern MLS squads are arrived at through a bargaining process between the team owners and the Major League Soccer Players’ Association (“MLSPA”), which is the players’ labor union. These agreements are documented in a contract called a collective bargaining agreement (“CBA”). The CBA sets down the off-the-field rules for everything in the league, from salary cap limits, whether a player is allowed to go spelunking (Article 16) or gamble (Section 20.9), insurance and worker’s comp (Article 21), the maximum number of training hours, and drug testing, to how many charter flights each team can book during the season. The scope is huge, and each of the terms is worked out during the negotiation process.
A CBA last ran its course and expired after the 2019 season. As you may remember, the players came close to striking in early 2020 before the owners and the MLSPA agreed to and ratified a 5-year contract just before the 2020 MLS season kicked off.
You likely also haven’t forgotten that there was a global pandemic less than a month into the second year of that CBA’s effectiveness, which resulted in a significant write-off of the 2021 season and empty stadiums due to the COVID restrictions. This led to unforeseen changes to the economic outlook of the league. Consequently, the owners forced the MLSPA to re-negotiate, meaning the CBA signed in 2020 was torn up after only one full year of effectiveness. I don’t think we ever even got the full text of the 2020–2024 version of the CBA, but we do have the infographic overview released by MLSPA, which is copied below.
The COVID-induced re-negotiations ultimately led to ratification of another CBA in 2021, this one running through end of the 2027¹ season and replacing the old one. This is the CBA that is currently governing the league’s operations, and therefore any references to section numbers in the CBA are referring to this version.
I have created an overview of the relevant numbers in this 2021–2027 CBA, which you can see below in Figs.1 and 2. These amounts can also be found in Section 10.10 of the CBA. As you can see, total cap space and General Allocation Money (“GAM”) increases year-on-year after an initial flat a period, while Targeted Allocation Money (“TAM”) decreases. The ramifications of the changing levels in these various allocations will be discussed in further detail below.
MLS roster rules
MLS Roster rules allow for a squad of up to thirty player contracts, which broadly fall into two roster categories: senior or supplemental. Any player allocated to these two rosters is eligible for gameday selection. Each are explained in more detail below.
Senior roster
The senior roster is what you probably think of when you think of an MLS player. They make up a majority of each team and are, usually, the biggest contributors. A team must have between 17-20 senior roster players, but if a team chooses to fill only 17 senior roster places, the league will charge a senior minimum salary cap hit for the 18th senior spot (Section 19.1(i)), meaning that 18 roster spots are filled on paper, even if the team only has 17 senior players.
Pursuant to Section 10.3 of the CBA, senior roster players must be paid² the senior minimum salary, which, as you can see in Fig.1 under the column labeled “senior min”, increases each year, both in dollar amount (from $81,375 in 2021 to $125,875 in 2027), and also as a percentage of the total cap hit (1.66% in 2021 vs 1.78% in 2027).
The main rule is that senior roster players’ salaries count against the salary cap at a dollar-for-dollar rate, meaning that if a senior salary player makes $100,000 in 2023, that will correspond with a $100,000 cap hit against their team’s 2023 salary cap.
Supplemental roster
The supplemental roster is the second category of players, and is defined inclusively as anyone who is on the team that isn’t a senior roster spot player (Section 2 (gggg)). The main rule with supplemental roster spots is that their salary numbers do not count against the salary cap (Section 19.1 (ii)). I wish it could stay that simple, but this is MLS, so how they don’t count against the cap has to be very complicated.
The supplemental roster is limited to 8 players in the CBA (roster slots 21–28), though in the CBA it says that the league may, at their discretion, increase this number, which they have indeed done, bringing the number to 10. So now it’s more accurate to talk about the supplemental roster being slots 21–30.
The supplemental roster is further divided into three sub-categories: (a) slots 21–24, (b) slots 25–28, and (c) slots 29 and 30, each with similar but distinct eligibility rules.
While slots 21–24 do not count against the salary cap because they are supplemental roster players, the league requires that they must be paid a base salary which is at least the senior minimum salary, as if they were senior roster players. This may include (1) Homegrown Players (“HGPs”)(including those subject to the homegrown subsidy), (2) Generation adidas players (“GA” players), and (3) MLS Super Draftees.
Slots 25–28 (called the reserve roster) also do not count against the cap, but are able to be paid a lesser amount (called the “reserve minimum”). The reserve minimum threshold is laid out in the CBA, and increases each year (see Fig.1 under the column labeled “rsrv min”). These roster slots can be filled with the same players as with slots 21–24, with the exception of MLS SuperDraftees, who must make the senior minimum.
Finally, slots 29–30 may only be filled with HGPs that are earning at least the reserve minimum salary, but can be earning more if subject to the homegrown subsidy.
I have done my best to visualize these roster construction categories below in Fig.3.
M Garber’s House of Curiosities, est. 1993
MLS roster rules are hilariously involved. The state of the roster rules is either a national embarrassment or a charming quirk depending on your predilections, but the truth of it is that I have spent a decent amount of time trying to figure these rules out and I know I don’t have all of it down. Add to this the league’s insistence on being pretty opaque, or at the least vague, and their maintenance of a unilateral right to just conveniently cherry pick when rules apply and when they don’t, gives it all a black box feeling. Even if I fall further toward the “charming quirk” end of the spectrum, I fully understand the criticisms and really sympathize with them. By the end of this monstrous post, you’ll see how we are able to triangulate to get within touching distance of some real conclusions about how MLS teams build their rosters with the information made available to us, but can never come to fully clarity because we lack a whole bunch of information around the margins.
Below is a discussion of the MLS roster rule concepts that are most commonly confronted. Right off the bat, I think it’s important to remember that at the most basic level, all of these roster mechanisms are avenues to allow teams to move whole or parts of a senior player’s salary cap hit off the books, meaning cap space left over to add squad quality or depth. The more efficiently a team can use these roster building tools to move senior salary allocation off cap, the more resources the team will have to use in building a squad.
But it’s equally important to understand that these roster rules are more than just hoops teams jump through to build a squad. They are also financial nudges that allow for the league to incentivize team behavior they want and to disincentivize team behavior they do not want. What the league wants its teams to do has changed over time, as the league has grown, retracted, grown again, changed rules, and found new markets, sources of income and global relevance. Some of these rules were introduced as a way to address issues the league identified as a problem. But circumstances may have changed, meaning the mechanism introduced is no longer needed or is now woefully inadequate. So if you think these rules are bad, stupid, conflicting or overlapping, it may be worthwhile to remember that the rules are arrived at through collective bargaining over periods of time, and the changing landscape of MLS goes a long way to explaining why they are the way they are.
But very quickly, before discussing how salaries are moved off the cap, let’s talk about what the salary cap is.
Salary Budget
The Salary Budget, or “cap”, is the total amount a team can pay its players in salary once you shed all the off-cap salary amounts, and apply other roster mechanisms to offset salaries that would otherwise count against the cap. The dollar amount in on-cap spend that teams must be under to be compliant with MLS rules is found in the CBA, and it changes each year (see Fig.1). In 2023, it is $5,210,000.
There is also a salary floor which is contingent on the league to maintain. This amount is equal to 95% of the cumulative salary cap amounts for all teams, as laid out in Fig.4 below. If the league fails to maintain this salary floor on each year’s roster freeze date (i.e. the later of 4 weeks before end of regular MLS season or 15 September), then the league has the right to make up the underspend by the next year’s roster freeze date (see Section 10.10 (xvii)).
The league is, as far as I can tell, nowhere near this floor.
General Allocation Money
General Allocation Money (often called “GAM”) is defined in the CBA as “a specific pool of money a Team may use to […] allocate to Players to reduce the corresponding Salary Budget Charge to its Salary Budget.” This means that if a team is, for example, $1,000,000 over their salary cap limit with the players on their roster, it can apply GAM1,000,000 to cover the overage, thereby “buying down” the contracts at a dollar-for-dollar rate in order to ensure cap compliance. In other words, GAM is a way for the league to indirectly expand the salary cap threshold without actually doing so.
There are theoretically no limits for how many players’ contracts to which GAM can be applied (Section 10.10 (xvi)(b)), but it must be applied within certain rules, which effectively limit its use. First, GAM can only be applied to an actual player’s contract. It can’t be applied at a team level to simply buy down whatever cap overage exists when taking all the teams’ contracts cumulatively. Secondly, GAM must be applied to a player’s contract in a minimum initial amount of GAM75,000 (Section 10.10 (xvi)(f)). Finally, GAM can only be used to buy down a player’s salary cap hit to a minimum of $150,000⁵(Section 10.10 (xvi)(d)).
GAM has other uses as well. It can also be used to “sign any Free Agent Player” that is new to MLS or to re-sign an existing MLS player, and it can also be traded to other teams for any other tradeable asset (players, TAM, international roster spots, etc). GAM can be applied at any time until the roster compliance date, and teams can choose to allocate more GAM to a players’ contract that already had GAM allocated to it in order to open up more cap space should they wish to sign a new player (Article 10.10 (xvi)(h)), but once an amount of GAM has been allocated to a player, it cannot be retracted (Article 10.10 (xvi)(i)).
The specifics of GAM allocation amounts from the league to the teams is complicated and probably hasn’t ever been fully made public. We do know that, as a point of departure, GAM is allocated in the amounts stipulated under the CBA and it increases each year, meaning the effective salary cap (i.e. GAM + cap, see the blue line in Fig.2) is growing even more than the actual salary cap number says it is.
However, this CBA, drafted in 2021 near the expiration of the media rights deal MLS previously had with FOX and ESPN, allows for an upward adjustment of the GAM allocation amounts listed in the CBA (see Section 10.11) based on the revenue brought in by the new media deal MLS made with AppleTV, which started this year. Whether these adjustments are being/have been made, we will not know unless MLS makes it public, which as far as I know, they have not. We likely won’t know until we see that teams are consistently going over their cap and GAM allocations each year by similar amounts, then we’ll be able to reverse engineer a good guess as to how much these GAM allocations have been increased as a result of the media deal with AppleTV.
But even absent any uplift in GAM due to media rights, it’s nearly impossible to get clarity on how much GAM is sloshing around at any given time because MLS does not specify which year each GAM dollar is. You see, GAM must be used within 5 transfer windows or it expires completely and cannot be applied by a team any longer, and after 3 transfer windows, the GAM value is reduced by 50%. So when one sees a transaction occur — for example, Danny Leyva being loaned to Colorado Rapids for GAM 97,000, one can’t be sure if that GAM was new GAM, reduced value GAM or GAM about to expire, meaning its exchange value is extremely difficult to pin down.
Just to further annoy everyone, there are other triggers that unlock GAM allocations for teams that meet certain criteria, for example, not making the playoffs (GAM 200,000), being an expansion team (GAM1,100,000), being an existing team in an expansion year (GAM100,000), qualifying for Concacaf Champions League (GAM 140,000), etc. You can read a more exhaustive list of these GAM triggers on Wikipedia.
Targeted Allocation Money
Targeted Allocation Money (“TAM”) is very similar to GAM, though it has a narrower scope of uses because more criteria must be met for its application to player contracts.
It can, like GAM, be used to buy down contracts of players that are over the max senior cap hit. However, it cannot be generally applied to any player. Rather, the player must be a “TAM player”, i.e., a player that makes between the max senior salary cap hit and the max TAM salary cap hit ($1,000,000 + plus the max senior cap hit). In 2023 numbers, that means the player has to make between $651,250 and $1,651,250.
TAM may also be used to buy down DP players to TAM player status. Again, this can only be done with the players who make between the max senior cap hit and the max TAM cap hit, but who have, for cap purposes been declared a DP in order to save their allocation money. The Sounders have taken this route many times, most recently with João Paulo, who will provide an example.
In 2021, he was guaranteed to make $1,050,000. At that time, Sounders chose to allocate their third DP slot to his contract, meaning his salary would hit the cap at the max senior cap hit (then $612,500), and they didn’t need to use any TAM or GAM to buy the rest of his $437,500 in salary down.
However, one year later, Sounders signed Albert Rusnák, who in 2022 was guaranteed to make $1,800,000. The Sounders then rightly decided — because Rusnák’s contract was richer than João Paulo’s — to convert João Paulo’s contract into a TAM contract, allocating the requisite amount in TAM to buy his contract down to the max senior contract threshold, thereby freeing up the DP slot to use on the more expensive Rusnák contract, saving themselves about GAM300,000 for use elsewhere in the process. In other words, João Paulo’s contract hit against the cap at $612,500 and TAM was used to cover the rest of his contract at a dollar-for-dollar rate, while $612,500 of Rusnák’s contract hit against the cap, and the rest of the $1,187,500 of his salary was moved off cap due to the 2022 DP allocation.
Just a few further notes about TAM and GAM:
First, the CBA makes a distinction between what it calls “mandatory” and “discretionary” GAM and TAM. These terms stem from the CBA’s definitions of Mandatory Spend and Discretionary Spend in Section 10.10 (i)(a) and (b). The definition of Mandatory Spend is the normal cap amount, plus the GAM allocation per year, and the definition of Discretionary Spend is the amount of TAM listed by year in clause 10.10 (ii).
After reading and re-reading the CBA, I have chosen to simply not even try to explain these concepts because I just don’t believe the CBA, on its own, is clear on what these two categories mean. For example, if Mandatory Spend is the cap space plus the GAM allocation by year, then by definition no amount of TAM can fall under Mandatory Spend, so how does the league reserve a right to convert discretionary TAM to Mandatory TAM, and what is Mandatory TAM (see 10.10 (xxi))? There is apparently a distinction between mandatory and discretionary spending as it pertains to GAM and TAM, but I simply cannot figure it out based on the clauses in the CBA.
Secondly, like GAM, TAM can be traded for other tradable assets within MLS, meaning you can have two teams trading roster mechanisms without actually sending any players back and forth. Sam Stejskal wrote a good article about this a long time ago which explains a lot of things, and if you’re interested in reading about MLS esoterica, it’s a classic of the genre.
Finally, the CBA states that teams are not allowed to “commingle” TAM and GAM (Section 10.10 (xvi)(e)), meaning if a team allocates TAM to a TAM player player to bring his cap hit below the max senior cap hit, it cannot then allocate GAM to further buy down that same player’s cap hit even further.
Home Grown Player
A Home Grown Player (“HGP”) is a player acquisition mechanism, which allows teams to sign players directly to their MLS team if they’ve (1) played in their academy for at least one year and (2) met certain other training and retention requirements (these requirements are, of course, not public). There is no limit on how many HGPs a team can sign in any given year. However, if you remember from the discussion of the reserve roster, only HGPs may be allocated to roster slots 29 and 30.
This acquisition mechanism allows for players to be placed on the supplemental roster, meaning no cap hit.
You may also run across a term called Home Grown Player Subsidy (“HGP Subsidy”). This is simply an allocation of TAM that is reserved for use only on HGPs. This amount of TAM may be used pay HGPs a certain amount of salary over and above the roster minimum relevant to the roster they’re allocated to (up to $125,000 more than the senior minimum salary if allocated to roster slots 21–24, or $125,000 above the reserve minimum if allocated to roster sports 25–30).
Generation adidas
This player acquisition mechanism has, in many ways, been displaced by the HGP mechanism, but it is still around. MLS describes it as “a joint program between MLS and adidas that is dedicated to developing exceptional talent in a professional environment.”
As far as I can tell, it is the league that determines, arbitrarily, which players are selected for this program, but it seems to be used nearly exclusively on college underclassman players entering MLS through the SuperDraft or youth national team players, who are then signed directly by the league before any being allocated to a team via another mechanism. The Generation adidas program guarantees their salary for at least 3 years, and they are allocated to their team’s supplemental roster regardless of their salary, meaning no cap hit, and also makes the risks associated with leaving college early (and thereby ending their ability to play college soccer again) a bit less risky.
Sounders currently have no Generations adidas players in their squad, though it’s worth mentioning that back in 2008, Steve Zakuani entered the league via the SuperDraft as a Generation adidas player.
Designated Player
A designated player (“DP”) is a specific roster mechanism that allows for the shifting of a few of a teams’ most expensive contracts off the salary cap hit. If a player is allocated one of the team’s DP slots, these players can be paid in excess of a max senior cap hit (this is set at 12.5% of the total salary cap, i.e. $651,250 in 2023⁴), but any amount in excess of that threshold does not count against the salary cap.
Take, for example, Nicolás Lodeiro. He is guaranteed to be paid at least $3,256,667 in 2023, which is like 400% more than the 2023 max senior cap hit of $651,250 (see Fig.5 below). However, because his contract has been assigned one of the club’s DP slots, the $2,605,417 that he’s slated to receive in guaranteed compensation that’s over the max senior cap hit threshold does not count against the cap.
Lodeiro will obviously still be paid the full amount of his salary, but 80% of his salary does not affect Sounders’ cap budget due to his status as a DP. However, that $2,605,417 of his contract that is above the max senior cap hit needs to be reimbursed to MLS by his club. So, while it is MLS that pays each league player directly, each club has to determine what amount of spending on DP roster spots they’re willing to pull the trigger on. But clearly, it is common sense that teams should use DP slots on their most expensive players in order to diminish the cap hit as much as possible.
Teams get two of these DP roster spots each season, and may use a third, however the third DP spot is opened up to use only after a team pays a $150,000 luxury tax to the league, which is then used to fund the GAM and TAM cash pools that are allocated to teams each year (more on that later).
Section 10.10(xi) of the CBA is an interesting little side note. It says that MLS may, “in its sole discretion”, increase the cap hit of the third DP slot to a maximum TAM cap hit (rather than the max senior cap hit) starting in 2024. This will be explained in more detail under the TAM section below, but a max TAM cap hit is $1,000,000 more than the senior cap hit in 2023, meaning that potentially up to $1,000,000 of the third DP’s salary may count against the cap starting 2024. $1,000,000 is 18% of the total cap hit in 2024, which is, to put it mildly, a significant chunk of the salary cap. In addition, the U22 Initiative rules, introduced near the end of the 2021 have certain benefits that are contingent on teams not using the third DP slot (again, this is discussed in more detail below). In other words, MLS seems to be trying to disincentivize teams from using their third DP slot.
Finally, for the real heads, a quick note on the budget charge of DPs. Obviously, it’s axiomatic that a DP will hit the cap at the max senior roster cap hit (often called the “DP threshold,” see Fig.1 again). However, for the purposes of determining whether or not a DP can be bought down using TAM depends on whether or not their cap hit (or “budget charge” in the parlance of the CBA) is above or below the max TAM salary threshold. This is quite important for teams as they look to juggle roster rules to fit in as many high performing players as possible.
The way the budget charge is calculated by MLS for DP purposes is sum up the total guaranteed salary of the contract plus any transfer fee paid for the player, and divide it by the guaranteed years of the contract. In other words, it doesn’t matter if the player is scheduled to have a salary uplift or decrease year-on-year over the course of the contract, or the transfer fee is paid in instalments or in a lump sum, because the DP budget charge is based on the average of the guaranteed salary years plus annualized transfer fee.
Young Designated Player
If the DP slot is known as the “Beckham Rule”, the Young Designated Player (“YDP”) rule should probably be known as the “Almirón Rule”. A YDP is simply another roster category that allows for the reduction a player’s cap hit if they meet certain age criteria (either the player falls into the 20 years old and younger bucket, or the 21–23 years old bucket, with varying cap ramifications).
If you understood the concept of a DP discussed above, then this is fairly straightforward, and I’ll just copy the clause from the CBA below.
The purpose of this roster mechanism, and the reason it was introduced in the first place, was to incentivize teams to bring in younger players that were above the max senior cap hit threshold. Before this rule, it was argued by some teams that because each team only has 2 (or 3) DP tags, and because they are so crucial to the competitiveness of the each team, the league was disincentivizing teams from signing younger, less proven players, because the risk of failing was so great. This rule added the ability for a team to attempt a punt on a young player with high upside, but with less downside risk, because the cap hit for these players (either $200,000 or 150,000 depending on the age of the player) is significantly lower than the max senior cap hit taken up by a full DP ($651,250 in 2023).
The Sounders currently have no YDPs in their squad, so this rule has no bearing on their current roster build.
U22 Initiative
The U22 Initiative, introduced in 2021, is a roster mechanism that was introduced in an effort to further incentivize MLS teams to buy young players. It allows teams to sign up to three players to make up to the max senior roster cap hit ($651,250 in 2023) provided they are still under 23 years old at the end of their first season in the league. If they qualify, their salary cap hit will be the same as the YDP mechanism cap hit (either $150,000 or $200,000 depending on age).
Crucially, this cap hit includes the allocation money required to acquire the U22 Initiative player. Usually these transfer fees are included in the cap hit for a player on the year they are acquired³. This is particularly important for young players, as the transfer fees are usually higher relative to the value to you get immediately, since much of the transfer fee is considered payment for potential value add down the line.
And with that, we can finally conclude this discussion of the MLS roster rules, at least until they introduce or reinvent another one in a few months’ time.
I literally cannot believe you made it this far. Congratulations, you’re a real MLS sicko. Your card’s in the mail.
The Seattle Sounders
Now that the basics are out of the way, let’s take a look at the Sounders roster.
Total spend
First, from the salaries list released by the MLSPA, you can see that the Sounders will spend approximately $19M in total player salary outlay. In the context of the league, this puts them at number 7 out of the 29 teams, or approximately in the middle of the upper half, and more or less right in between the lowest spenders (Montréal, $10M) and the highest (Toronto, $25M).
Obviously $19,000,000 is way over the cap space allocated to MLS teams in 2023 ($5,210,000). The Sounders use a number of the mechanisms discussed above to shift that $13,820,000 overage away from hitting the cap. I’ve done my best below to explain how the Sounders use each tool below to shift salaries off the cap.
Supplemental roster
The Sounders, through their academy and Tacoma Defiance (their MLS Next Pro developmental club), have signed a number of younger players who fill out the bottom end of their roster. They use all 10 supplemental roster spots. (Indeed, it is likely be that they actually have 11 supplemental players on their roster, but Danny Leyva was sent on loan with Colorado Rapids for the rest of the 2023 season). As you can see below, that means that immediately all the salaries allocated to roster slots 21–30 (roughly $900,000) come off the cap.
Just a quick disclaimer that the above may not be totally correct. It may be, for example, that Cody Baker was actually signed to the Supplemental Roster while Reed Baker-Whiting is on the reserve roster. At this point, though, it no longer matters for our interests since all of these contracts fall under the supplemental allocation, meaning the all the contracts are a $0.00 cap hit, so we don’t need to spend too much time being precise.
Designated Players
The Sounders are a team that has, up until now, basically always used all three of their available DP slots, meaning that they must pay the $150,000 luxury tax to the league (though that amount does not affect the cap at all — it’s just a straight cash payment from the club to the league), and it further means they are able to only use one U22 Initiative slot. The three DPs, by definition, hit the cap at the max senior cap hit. That cumulative cap hit sums up to nearly $2,000,000 (or 37.5% of the cap), and their full salaries are nearly $8,330,000 (43.7%) of the total Sounders spend.
By using their 3 DP slots on Lodeiro, Ruidíaz and Rusnák, they have allocated these roster slots in the most efficient way they can, since Lodeiro, Ruidíaz and Rusnák represent the biggest salaries on their books, meaning a shift of over $6,200,000 in salary off cap.
U22 Initiative
As mentioned above, the Sounders have only one U22 Initiative slot available to them as a consequence of their choice to allocate all of the available DP slots. This U22 Initiative slot is allocated to Brazilian winger / forward Léo Chú’s contract, who was signed to the U22 Initiative contract in 2021.
As such, despite the fact that he is guaranteed to earn $550,000 in 2023, Léo Chú’s salary hits the cap at $200,000 per year, saving the Sounders $350,000 in cap space.
TAM
Up until now, we could be relatively sure that the figures we were working with precise, but now we really get into the real guessing game. TAM and GAM transactions (how they are allocated, traded, and utilized, carried over, and when its value reduces) is not always made public other than in random drip-fed information in new reports and interviews. What this means is that everything written below this point is probably wrong, but it’s at least the best we can do.
I want to start with TAM, because the scope of player contract that TAM can be applied to makes it a simpler process to make educated guesses about whose contracts are being bought down. There are only six players that make between $651,250 and $1,651,250 on the Sounders 2023 roster: Xavier Arreaga ($750,000), Yeimar ($741,820), Héber ($1,019,000), João Paulo ($1,383,333), Jordan Morris ($1,560,000) and Cristian Roldán ($1,441,000), meaning they are the only players that have contracts to which TAM can be applied.
The total amount of TAM required to buy these TAM players down under the cap is TAM2,987,653, which is only slightly more than each MLS team’s TAM allocation for for 2023 (TAM2,720,000). We can then probably assume that the six players eligible for TAM allocation are the players are taking up all the 2023 TAM, and that the approximately TAM260,000 shortfall is made up by some TAM allocated in 2022 which has been rolled over or something else of which we aren’t aware.
GAM
This is the hardest part. GAM is by definition basically a slush fund and is applied in bits to a contract here and a contract there to ensure compliance. It is also significantly more fungible than TAM, so it can be applied in more use cases, which makes it hard to follow.
At the very least we know the starting point for the GAM allocation in 2023, which is GAM1,900,000. Additionally, over the last year I have done my best to track the GAM transactions that Sounders have entered into, see Fig.6 below.
At this point, it’s smoke and mirrors. You just have to guess at where it goes. The best bet is to simply sum up the total amount of the team salaries, subtract the amounts that come off cap from the player contracts being allocated to the supplemental roster, DP slots, U22 Initiative slot(s) and the TAM allocations, and then see what’s left over.
Then you assume the team’s GAM allocation from 2023 and any amounts rolled from previous years covers any amount above the cap ceiling. While I said above in the introduction to GAM that teams must apply GAM to actual players’ contracts — and not just apply it generally to any cap overage — there is no way to know which contracts’s cap hit the team is choosing to buy down with their GAM. However, since all dollars hitting the cap hit at the same rate, they are fungible. As such, it doesn’t matter to whose contract the GAM is applied as long as the players meet the GAM eligibility requirements. Which is exactly what I have tried to show below in Fig.7.
When you break it down, it really is absurd that, of the 30 open roster spots on the Sounders, only 8 of them do not have some sort of roster mechanism applied to them, and indeed, most likely one or a couple of these eight remaining contracts likely are the avenue in which the team has used its GAM to buy down the team’s cap hit.
Conclusions / Observations
I simply cannot figure out how the Sounders are cap compliant because I have imperfect information. By the calculations in Fig.7, they are $538,457 over the cap without the requisite allocation money or other roster mechanisms to fix that problem.
But, as I said, that doesn’t mean they don’t have it. The allocation money must be hanging around, whether that’s through transactions we have not been made privy to, from rolling over allocation money from previous seasons, bringing it forward from future seasons, or the allocation amounts potentially being increased due to the AppleTV revenue.
Suffice it to say that the Sounders are probably cap compliant, but probably have very little cap space to do anything this season unless / until there is a a big departure or two.
As I have noted in a previous post, there is going to be a lot of roster churn this coming offseason regardless of whether the personnel stays relatively stable. Due to the hamstring issues, there has been some discussion about whether the Sounders may choose to buy out the final year Raúl Ruidíaz’ DP contract. I don’t see that happening. The possibility of re-signing either or both of Albert Rusnák and Nicolás Lodeiro to TAM contracts has also been mooted, which seems more likely to me, though the diminishing amount of TAM available in 2024 will likely require pushing out other TAM players to make this possible.
What is significantly more intersting to me is what Sounders choose to do with their DP slots / U22 Initiative slots in the future. It’s a binary choice: you either get three DPs and one U22 Initiative spot, or you get two DPs and three U22 Initiative spots. If they can hit the target with the U22 Initiative signings, obviously the right route is to have only two full DPs, as it allows for up to five big money signings with a diminished cap hit rather than four. The prospect is mouth watering. But it all hinges on their ability to sign young players who can add value. The Sounders have shown a real knack at finding high-level TAM / DP players who contribute to the team’s success. The likes of Raúl Ruidíaz, Clint Dempsey, Nicolás Lodeiro, and Obafemi Martins have achieved legendary status. While the sample size is very small, their U22 Initiative track record is significantly less impressive.
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Notes
¹ While the current CBA technically runs through 30 January 2028, I have chosen to say that it runs from 2021–2027 because the 30 January 2028 is before the 2028 MLS season kicks off, meaning it will only span the 2021–2027 seasons. While the winter offseason in 2027–2028 is important for players who need their employment benefits, medical insurance, etc., for our purposes I’m only looking at it as running until the end of the 2027 season.
² It’s worth noting that when we talk about player salaries, this doesn’t include just the amount in USD or equivalent in CAD they’re paid, but includes several other forms of compensation, including costs of green card processing (if relevant), marketing or loyalty bonuses, transfer fees, agent’s fees, among others. Full list is found in Section 10.10 (iv).
³ A sincere thank you to @Interpearsonal on twitter who helped me understand this rule.
⁴ Designated Player salary cap hit for a full season is 12.5%, but is only 6.25% for the year they join the team if they join during the summer transfer window.
⁴ MLS reserves its right to convert this number from $150,000 to 3.06% (or less, in its discretion) of the applicable current salary budget, see table below for these figures (see Section 10.10 (xvi)(d)).
Whether MLS has converted the $150,000 number to 3.06% for any of the years so far has not been made public as far as I know, so it’s anyone’s guess as to what the actual numbers are here.
