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MLS just handed Toronto FC up to $4 million in targeted allocation money

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Prepare for a game-changing winter for the league.

MLS: All-Star Game
MLS commissioner Don Garber.
Mark J. Rebilas-USA TODAY Sports

MLS’ offseason just went kaboom.

Ahead of commissioner Don Garber’s annual State of the League address 24 hours before the MLS Cup final in Toronto, the league announced the introduction of new, discretionary targeted allocation money (TAM) for the 2018 and 2019 seasons.

Each club will continue to receive $1.2 million in TAM per year from the league, as was the case in 2017.

Starting next season, though, teams will also be allowed to spend another $2.8m in TAM that they fund themselves. It is the biggest indication yet that MLS is willing to sacrifice parity to give the league’s new class of ‘haves’ - including the likes of Toronto FC, New York City FC and Atlanta United - the chance to put their resources to use.

That is likely to increase the gap between those clubs - Toronto, NYCFC and Atlanta finished first, second and fourth in the league this season - and the ‘have nots’ in smaller markets such as Columbus, Colorado and Dallas. Those three sides have all been conference finalists at least once over the past three seasons, but already spend considerably less than some of their rivals.

Giving richer clubs the means to squeeze up to $4m of spending on transfer fees and wages under the salary cap will have dramatic ramifications.

With the $1.2m in TAM allocated in 2017, Toronto were able to sign Victor Vazquez, who finished eighth in MVP voting, and make Panama international Armando Cooper’s loan permanent.

This offseason, the amount of TAM they have available will more than triple.

Also notable is the fact that the maximum salary for a TAM player will rise from $1m to $1.5m.

For those unfamiliar with TAM, it is primarily used to buy down the salary of a player earning more than the league maximum of approximately $450,000 so that he does not count as a designated player. Vazquez’s guaranteed compensation in 2017, for example, was $700,000, but Toronto used TAM to pay off a portion of that and reduce his cap charge below the maximum allowed.

A full explainer is available in the league’s announcement of this new initiative.

The surge in spending power comes at a particularly useful time for Toronto. They will be juggling their MLS commitments with extra games next year when they enter the CONCACAF Champions League, meaning more midweek fixtures and long trips to Central America.