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NWSL introduces allocation money, makes major changes to league rules

On a huge day for the league, we explain what changed, and why

Jason Anderson

Entering into a pivotal offseason, the National Women’s Soccer League has announced major changes to its financial guidelines, including a nearly 20% higher salary cap and the introduction of allocation money. Player contracts can now be guaranteed, the off-field help teams can give is no longer subject to a cap, and teams are allowed to pay transfer fees to acquire players from outside the league.

Via a league press release, NWSL President Amanda Duffy said “The league’s owners are committed to investing in our world-class players. This is an important step in the growth of the league from which every NWSL player, current and future, will benefit and these changes will further enhance the league’s global leadership in the women’s game.”

The changes are wide-ranging, so let’s take them one at a time:

The salary cap went up, and by a lot

The 2020 salary cap is $650,000. Last year, that number was $421,500, meaning that the cap has increased by 54.2%. When you consider that these numbers don’t include the new allocation money option, or the team assistance cap’s demise, it’s clear that NWSL teams have allowed themselves to spend significantly more than they used to.

Those changes are reflected in a raise of both the maximum salary (now $50,000) and minimum ($20,000). While those figures absolutely need to continue rising each year, they represent raises of 8.2% at the top end, and 20.9% at the bottom.

Salaries are obviously still too low, but the NWSL has come a long way since 2013:

Allocation money is here, but it’s different from MLS’s version

Perhaps the biggest development in today’s release is the concept of allocation money, which NWSL teams will be able to start using to expand their cap, and to pursue/retain elite players who might otherwise choose to pursue deals with high-paying teams in Europe or China.

For fans familiar with MLS, the term “allocation money” probably set off some alarm bells in terms of things getting extraordinarily complicated, but NWSL’s version is currently much more simple. Teams can buy up to $300,000 in allocation money from NWSL per season, and the money can’t be applied to players allocated to the league by the USWNT or Canadian national team.

That said, there is one key similarity to MLS’s version: allocation money can be traded. While the league’s teams are all showing some real ambition with these moves, allocation money trades may be the real indicator of how aggressive a given club is about being the very best in the league. Don’t be surprised when, say, Portland is acquiring a big chunk of change from...oh, I don’t know...Houston.

There are, as with all things American soccer, further stipulations. Players have to meet one of the following requirements for teams to have the option of using allocation money on their contract:

  • NWSL Best XI or Second XI for either of the two most recent seasons (2019, 2018)
  • International players who have more than three caps for their national team in the prior 24 months
  • NWSL MVP, Golden Boot, Rookie of the Year or Defender of the Year winner for one of the two most recent seasons (2019, 2018)
  • Domestic players who have completed at least five seasons in the NWSL
  • Players who were formerly designated as allocated players by the U.S. or Canada (unless if the player refused the option to be allocated)
  • Players previously on a contract that included allocation money

Teams can only use allocation money on players whose salary would exceed the league maximum, which is to say there’s no way to use allocation money to, say, sign a player to a near-max deal to get around the salary cap.

Allocation money can also be used to pay transfer fees. Previously, NWSL teams had no option to pay a transfer fee, and just had to wait for the stars to align in terms of a transfer target’s contract ending. Teams are now also allowed to sell the rights to players (USWNT allocated players excluded) to bidders outside of the NWSL, and must choose between either retaining that player’s NWSL rights or retaining an unspecified portion of the transfer fee.

Guaranteed contracts are here

This aspect of the rule changes was more or less let out of the bag early, as the Portland Thorns announced yesterday that they’d signed Ellie Carpenter to a multi-year contract extension.

There is no limit to the number of guaranteed contracts teams can offer, but international signings and all contracts involving allocation money must be guaranteed. Contracts can last up to three years and can have no more than one option year built in. However, per the league release, teams can offer a three-year contract that also has an option year, so the stated three-year maximum can be worked around.

The league’s release did not make it clear whether the option years involved would be team-held, player-held, or mutual.

Permitted team assistance cap? Don’t worry about it

Previously, NWSL teams had to stick to a cap on the amount teams could spend on things like housing and cars for their players. This was to further artificially enforce parity, as a wealthier team could effectively expand their salary cap with a better housing option, or a nicer car, or other amenities.

However, in a decision that points to a more ambitious league, those days are over. The cap on that spending is gone, and the league has chosen to require teams to housing for all players. Teams have the option of either providing individual/shared homes or apartments, or providing players with a stipend to cover their housing costs.

Teams will not be required to provide cars for players, but if a team does offer a player a car, that car must be guaranteed to that player for the entire duration of the season. That assurance is also required for housing, which means players will no longer have to worry about having to move mid-season (as was the case with numerous players at Sky Blue FC a couple of seasons ago) or having their car suddenly no longer be available.

Aside from being just the right thing to do from an ethical standpoint, that stability should allow for players to more fully focus on being the best player they can be, rather than worrying about where they’re going to live next month, or how they’ll get to training tomorrow.

One more thing: Discovery lists

The league also ratified a change allowing for NWSL clubs to have up to three players on their discovery list during the course of an active season. From the day after the NWSL Championship until the day before the first match of the following season, that list expands up to seven players.

A player will be automatically removed from a given team’s list after 365 days, and teams can’t put that player back on their list until 90 days have passed. After the first 30 days a player has been on a given discovery list, if a second team submits the same player for their list, the first team has 14 days to submit a “player agreement form” to the NWSL before the second team will get a chance to make their move.

How do the players feel about all this?

In other words: Good!

NWSL players are keenly aware that adding almost a quarter-million bucks to each team’s salary cap means that the total pool of money available to them as a group has gone up dramatically. Yes, there will still be players trying to maintain a starting job in the best league in the world while making $20,000 in a market like our region, which is a lot less than those players deserve. However, some of these moves from the league’s owners (particularly the requirements that housing and cars be full-season pacts rather than something that can change) are clearly tailored to concerns the players have brought up. We may one day get to the point that the Players Association and owners are battling it out, but at the moment, there appears to be a mutual understanding.