One of the things that most passionate, hardcore fans such as myself like to do on a daily basis is question every move made by a player, coach, sporting director or owner. We believe we are just as intelligent and knowledgeable as those with the decision making powers on the team. It is fascinating to see, thanks to social media, in particular twitter, how we react when the team wins, ties or loses. Besides the performance on the pitch, also fascinating to see our reaction to moves made by the team with trades, player signings, formation on the field and who is part of the starting 11. One can argue that this pressure from fans is a good thing, as it holds the team accountable and motivates them to be successful. This article will focus on the business side of the team, particularly the management of the roster and the team’s salary cap.
For those of you not aware, the salary cap system in the MLS is unique and does not compare to other major sports in North America. For the 2013 season, the cap or amount each team cannot exceed in spending on player salaries is $2.95M. Seeing as we are in Montreal, I will do a quick comparison to the salary cap system in hockey. The NHL has a cap system that is calculated on every player on the team’s 23 man roster, whereas in MLS a roster can have 30 players on it, but only roster spots 1- 20 count for calculating the cap. These 20 designated roster spots are not published. In the NHL, it is rather easy to follow roster moves and any impacts on the salary structure of the team, whereas in MLS, this becomes quite a challenge. Besides not knowing the 20 man roster for purposes of calculating the cap, there are two more unknown variables that come into play: player salary/compensation and allocation money.
Player Salaries for purposes of calculating the cap
The league does not divulge player compensation but thanks to the player’s union, we get to see this information. Problem is, this can only serve as a baseline. The player union table published yearly shows a player’s base compensation. It is my belief that, for purposes of calculating the cap, the right number to use is the base compensation with an addition of extra costs such as fringe benefits. My assumption is the league wants to remain financially viable for a long time, so it is safe to say you want to calculate a salary cap with the amounts it really costs you in player salaries, meaning base salary plus benefits. I would say the amount of benefits to cover insurance (medical, dental, life) plus other costs associated with player payroll (such as transfer and loan fees) represents at least 20% in additional costs to the teams.
Therefore to make this exercise simple to follow, I will use the union base salary table and add 20%
Allocation money
The word allocation means to set aside for a particular purpose. In MLS, this purpose is outlined below.
From the MLS Pressbox:
Allocation money is a resource available to clubs in addition to their respective salary budgets.
A club may receive allocation money for:
(1) failure to qualify for the MLS Cup Playoffs;
(2) the transfer of a player to a club outside of MLS for value;
(3) expansion status;
(4) qualification for the CONCACAF Champions League;
(6) funds from purchased third designated player roster spots.
Each year the MLS Competition Committee determines the allocation amount to be made available to each club. Allocation money can be traded by clubs. Allocation money does not count against a club’s salary budget and can be used:
• To sign players new to MLS (that is, a player who did not play in MLS during the previous season).
• To re-sign an existing MLS player, subject to League approval.
• To “buy-down” a player’s salary budget charge below the League maximum of $368,750.
• In connection with the exercise of an option to purchase a player’s rights or the extension of a player’s contract for the second year provided the player was new to MLS in the immediately prior year.
NOTE:To protect the interests of MLS and its clubs during discussions with prospective players or clubs in other leagues, amounts of allocation money held by each club will not be shared publicly.
This is a major unknown variable which is a detriment to us wanna-be GMs. It is difficult to evaluate and judge a decision made by the team without knowing how much allocation money the team has, how much of it has been used and how much is left over. For purposes of calculating the team’s salary cap, I came up with a figure of 30% of the salary cap. In other words, I believe that MLS allocates a maximum of 30% of the $2.95M cap, or $885,000 per team. My logic is as follows: it doesn’t make business sense to have a salary cap to control spending, and then give teams an allocation which is very high. Therefore, it is my assumption the league wants to give teams some wiggle room, but not to the point where salary cap + allocation money exceeds $5M per team. You also want your allocation % to exceed the fringe benefit % to encourage teams to make trades and improve their rosters by acquiring new players.
The table below lists the 20 man roster that I believe is currently being designated for purposes of calculating the salary cap. The Impact has not traded any allocation money this year. By my estimates, the team is spending over the cap, and after the recent acquisitions of Bernardello and Lopez, there is a small amount of allocation money left for the rest of the season. Barring any unforeseen circumstances, it is my view that no other significant changes will be made to the roster. We will cross our fingers that our new players will give the team the necessary boost to make a push for the playoffs and Champions League.
| Spot | POS | # | Player Name | Age | HT | WT | Birthplace | Status | Base Salary (CAP HIT) |
| 1 | M | 23 | Hernán Bernardello | 26 | 5' 10" | 165 | Argentina | DP | $ 175,000 |
| 2 | F | 9 | Marco Di Vaio | 37 | 5' 11" | 172 | Italy | DP | $ 368,750 |
| 3 | M | 31 | Andrea Pisanu | 31 | 5' 11" | 160 | Italy | Regular | $ 100,000 |
| 4 | M | 19 | Blake Smith | 22 | 5' 10" | 150 | USA | Regular | $ 46,500 |
| 5 | M | 18 | Collen Warner | 25 | 5' 10" | 170 | USA | Regular | $ 110,000 |
| 6 | M | 22 | Davy Arnaud | 33 | 5' 11" | 160 | USA | Regular | $ 275,000 |
| 7 | M | 7 | Felipe Martins | 22 | 5' 7" | 150 | Brazil | Regular | $ 150,000 |
| 8 | M | 21 | Justin Mapp | 28 | 6' 1" | 161 | USA | Regular | $ 125,000 |
| 9 | M | 8 | Patrice Bernier | 33 | 5' 9" | 175 | Canada | Regular | $ 143,000 |
| 10 | M | 11 | Sanna Nyassi | 24 | 5' 8" | 145 | Gambia | Regular | $ 140,000 |
| 11 | GK | 30 | Evan Bush | 27 | 6' 1" | 185 | USA | Regular | $ 46,500 |
| 12 | GK | 1 | Troy Perkins | 31 | 6' 2" | 190 | USA | Regular | $ 225,000 |
| 13 | F | 15 | Andrés Romero | 23 | 5' 10" | 160 | Argentina | Regular | $ 48,000 |
| 14 | F | 35 | Daniele Paponi | 25 | 6' | 159 | Italy | Regular | $ 72,000 |
| 15 | D/M | 6 | Hassoun Camara | 29 | 6' 2" | 188 | France | Regular | $ 115,000 |
| 16 | D | 26 | Adrián López | 26 | 6' | 192 | Spain | Regular** | $ 150,000 |
| 17 | D | 14 | Alessandro Nesta | 37 | 6' 1" | 175 | Italy | Regular | $ 260,000 |
| 18 | D | 17 | Dennis Iapichino | 22 | 5' 10" | 160 | Switzerland | Regular | $ 110,000 |
| 19 | D | 5 | Jeb Brovsky | 24 | 6' 1" | 170 | USA | Regular | $ 80,000 |
| 20 | D | 13 | Matteo Ferrari | 33 | 6' 1" | 170 | Algeria | Regular | $ 240,000 |
| 21 | F | 33 | Andrew Wenger | 22 | 6' | 185 | USA | GA* | |
| SubTotal | $ 2,979,750 | ||||||||
| Add: fringe benefits (estimated 20%) | $ 595,950 | ||||||||
| Total | $ 3,575,700 | ||||||||
| Salary Cap | $ 2,950,000 | ||||||||
| Overage | $ 625,700 | ||||||||
| Estimated allocation money (30% of cap) | $ 885,000 | ||||||||
| Remaining allocation money | $ 259,300 | ||||||||
| * GA = Generation Adidas player, paid by league does not count for salary cap | |||||||||
| ** Adrian Lopez salary is not known, this is an estimate on my part | |||||||||