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The Salary Cap Issue

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Toronto FC already look to be in full swing with offseason mode with players being released already.  Yesterday on twitter, we recieved word that Matt Gold and Demitrius Omphroy will not be back with the club but with no official confirmation yet from TFC we are left wondering if anyone else has already been shown the door along with them.  The move can be interpreted a number of different ways but the bottom line is clear.  Toronto FC is going to get right down to business this winter and unlike the first 5 years should be ready when they kick off in March.  The two youngsters will probably both find new clubs at a lower level where they will get more chances to play and TFC will spend the money they were paying them to go out and find someone else who might have more to offer the club.

Winter seems to be focused on developing academy talent along with signing players who are able to make a contribution in the first team right away.  That basically means that most of the players that TFC could pick up in the draft, like Gold and Omphroy last year, will not be a major part of his plans.  Most times in the draft what you get is a 22 or 23 year old player who is going to need some grooming before they are ready to be a regular in the MLS.  There are of course exceptions to this but they generally come in the form of players in the first round or the Joao Plata's of the world.  Going forward Toronto will be looking less towards building through the draft and more to building using smart signings and through the academy.  Winter and co have already shown to have a decent eye for players who are worth taking a shot on as they picked up a fair few good players at a very good value this season.  The academy has also been doing well for Toronto FC with several of its grads making some impact on the senior team this year.

So if that is how Winter is looking to build the team and knowing that the team needs to be improved in a number of areas including depth, what can we expect to see from the club this offseason and what other moves might they have to make to ensure they get the squad they want while staying under the MLS salary cap?

*Thanks to Michael Przybylowski for his help with the numbers and salary cap rules

Before any real look at MLS that involves money you have to understand that even though the players union releases the salary figures each year it is still very hard to know with any real certainty who is on what length of contract, what their annual raise might be, or even what amount of allocation money a team is going to get.  In any sort of analysis like this you need a few large grains of salt and remember that a lot of this is conjecture.

What we do know is that this season the MLS had a salary cap set at 2,675,000 USD and as per the terms of the Collective Bargaining Agreement in place between the league and the players union, there will be a 5% increase to that cap for next season.  With that 5% increase counted, the base salary cap available to clubs will be just a shade over 2.8 million USD. 

On top of that a club like Toronto FC is certain to recieve some kind of allocation money from the league on top of the 2.8 million.  In the MLS you can get these extra funds for not making the playoffs, being an expansion side, or losing a top player to transfers or even retirement.  These funds are the hardest part to figure out since they are basically down to the MLS to decide, so we can't say with any certainty how much Toronto will be getting for missing the playoffs 5 years in a row.  There is also some talk of giving extra funds to teams that are still going in the CCL as these clubs require more depth to compete on so many fronts and with the MLS wanting its clubs to take the CCL more seriously there is good reasons to expect Toronto will get extra allocation funds this season.  In the case of Real Salt Lake this season, it appeared that they were given at least an extra 300,000 USD in allocation funds as that is how far above the base salary cap they seemed to be.  I will be using the same amount for Toronto FC just for the sake of argument, but with the MLS not being the least bit transparent about these funds it is hard to say anything for certain.

So what can a club do with these allocation funds?  Well they can be used to increase your salary cap, transferred to another team in exchange for players or picks, or they can be used to buy players in to the league.  In the case of Toronto it is likely that they will use the funds to increase their cap space since with 3 designated players already being on the roster for next year the space under that cap is already limited.  Under the current cap structure a designated player contract counts as 335,000 against the cap total.  So for Toronto we have to triple that number to account for the salaries of Torsten Frings, Danny Koevermans, and Julian De Guzman.  They will all be making a lot more than that 335K figure but that is all that counts against the cap so that is what matters for our purposes.  So TFC have already eaten up 1,005,000 of a cap that we can expect to be close to 3.1 million, leaving the club with another 2 million to spend and it's now we have to delve further into the wierd rules and regulations that make up MLS roster rules.

Firstly, It should be noted that in MLS only the first 20 players on your active roster are counted against the salary cap.  This is of course determined by how much the players are making so it is basically the 20 highest paid players on the team that count against the cap.  The base salary in MLS will likely remain at 45,000 but it is unlikely that anyone in Toronto FC's top 20 will be making that amount. 

Generation Adidas players do not count in this 20 man selection which is one of the bonuses of having these players on your team.  For Toronto though it is unlikely that they will have anyone on the team who has GA status next season unless Peri Marosevic ends up staying on his initial contract and is allowed to continue on being Generation Adidas. 

The last thing to note at this point is that Toronto FC will likely have 11 international slots for the next season.  The base number for these slots in the MLS is 8 but since they are tradable Toronto has managed to acquire a few more of them.  If my memory is correct they traded up to 11 this year and despite one of their slots going back to its original team Toronto will also have one of its own slots coming back leaving them at either 10 or 11 for next season.  For Toronto a number of these spots will be filled already by returning players including Frings and Koevermans.  The other internationals like Bouchiba, Soolsma, Williams, Plata, and Eckersley could all be back but it will be up to the club to decide how they want to use these slots.

For the sake of this argument I have had to select a few players who will not be returning next season and went with the ones who seem to be the most likely to be released.  The list I went with is DanLeigh Borman, Mikael Yourassowsky, Leandre Griffit, Nathan Sturgis, Javier Martina, and Eddy Viator.  The rest of the team I expect will eithe be returning, will be replaced by someone at a similar price point, or have no impact on the salary cap situation.

So doing the math based on some standard raises the rough figure that I come up with for the total salary cap hit of the players TFC currently has is 2,720,000 which means they would have 380,000 USD left under that projected cap of 3.1 million to improve the squad.  The other thing to note about that math is the fact that it assumes that the 17 players who were included will be the only ones included under the 20 man cap leaving 3 slots to be filled by signings.  The list ranges from the 3 designated players all the way down to Kyle Davies who makes 55,000 (roughly).  Now what does that leave Winter to work with?

If Toronto does not cut any of these top 17 players, or trade any of them, then they will be looking at having a budget to go out and sign 3 new players to round out the roster.  They would have around 380k to do this so it is possible to get 3 decent players in but I would prefer to see the club go out and sign one really good player and then two that would add depth where it is needed.  Ideally the club will go out and spend as much as 250,000 on a high quality centre back.  For comparison Adrian Cann will likely be making around 140,000 next year so spending 250k could allow the club to attract a top quality center back. 

Then there is the question of whether the club will be able to bring back Richard Eckersley.  In these numbers the cap allows for a budget of 220,000 to sign a right back but the question is who that will be.  The team currently has enough room under the cap to go out and ensure they get the two good defenders that they need so badly so it would be great to see the club go out and spend much of the money they have to spare to strengthen that area of the squad. 

If the club does go out and spend big on defenders it leaves just about 130,000 left which could be split down the middle and used to sign some servicable depth players.  Possibly another striker, left back, or midfielder which combined with some injured players coming back for next season should address the issues of depth for the most part.

This is all just to give an indication that the team should have room to work while staying under the salary cap and can even look to spend some serious funds on improving the worst areas of the team.  Do I expect all of the likes of Soolsma, Cann, Williams, Davies, Iro, Harden, and Bouchiba to be back?  Not at all really as some will certainly be shipped out, but I do expect for it to be in exchange for players who make a similar amount so the room will likely remain. 

The other key thing to note after looking at all the salaries is that the club could spend to bring in a very good center back without having to do anything like get rid of Julian De Guzman and use his DP slot for one.  It also shows that even if the team might consider trading Stefan Frei or Milos Kocic it will be more about not needed two quality keepers rather then needing the cap space.

One thing that we can safely say though is that the management team is not going to be taking much time off this winter.  They have already begun their work and I would not be surprised if we hear that the club has made its first signing sometime before the end of the month.  The funds are there under the increased cap so lets go out and spend them!