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MLS expands Targeted Allocation Money

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MLS increases the amount of Targeted Allocation Money and money for Homegrown talent that teams will be able to utilize over the next two seasons.

More TAM money for players like these the next two seasons
More TAM money for players like these the next two seasons
Brad Mills-USA TODAY Sports

Major League Soccer is pumping more cash into the compensation of its players. In an earlier announcement, MLS declared its commitment to invest $37 million in Targeted Allocation Money (TAM) to its teams for use over the next two seasons. Each MLS club will receive $800,000 in additional TAM dollars for both the 2016 and 2017 seasons. The money may be used by clubs to add greater depth to their rosters by investing in players who are not considered Designated Players but make more than the 2016 maximum roster salary of $457,500. Each club will receive the same amount of additional TAM funds over the next two seasons.

The expansion of the TAM program comes just months after the program was created this summer by allocating $500,000 to each team. MLS believes that this expansion, the largest expenditure on player compensation since the DP program began, will allow for teams to sign more impact players to come to MLS while also allowing for teams to re-sign key players currently on their rosters.

The 2016 TAM funds must be used or traded before the end of the 2017 Secondary Transfer Window, while teams will have until the 2018 Secondary Transfer Window to use or trade 2017 TAM funds. This does not include the initial $500,000 in TAM dollars, which can be used or traded until 2019.

Also, MLS is helping its teams sign more homegrown talent. An incremental $125,000 per season will be available to each franchise to sign Homegrown Players. D.C. United has been one of the more successful clubs in MLS in signing Homegrown Players, counting current goalkeeper Bill Hamid and former winger Andy Najar among the league's success stories.

Of note to D.C. United fans is that the team used TAM money this summer to reduce Chris Pontius's impact on the salary cap. With $800,000 extra TAM dollars to spend in 2016 and 2017, fans will no doubt be watching to see how the money will be used, whether it be to pay down the salary cap hit of a player currently on the roster, to re-sign an out-of-contract player like Perry Kitchen, or to maybe sign overseas talent.

Clubs may use some or all of the TAM funds to convert a player over the max salary charge of $457,500 but making less than $1,000,000 down to a minimum cap hit of $150,000. If TAM funds are used to free up a DP slot, the team must also sign a new DP at the same investment (or higher) of the player he will replace.

With a minimum of $1.6 million in extra money to spend now, it will be interesting to see how general manager Dave Kasper and coach Ben Olsen decide to use the additional funds. Will the team be proactive in using the money to re-sign Kitchen? Will they bring in a higher priced talent from overseas or a proven MLS veteran? How do you think the Black & Red should use the additional TAM funds? We want to know...hit the comments and let us hear your take.