Allocation money
funds granted to sports teams above a salary cap
In Major League Soccer (MLS) and the National Women's Soccer League (NWSL), two of the top-tier professional soccer leagues in the United States, allocation money represents an amount of money that teams can use to sign players or allocate to their salaries in order to remain compliant with the leagues' salary caps.
Major League Soccer
Reasons for obtaining
MLS teams receive general allocation money for these reasons:
End-of-season allocation of $200,000 for each team that does not make the post season (CBA section 10.17 & roster rules)
Expansion year allocation of $1.1 million for each expansion team (CBA section 10.18a)
Expansion year allocation of $100,000 for each existing team (CBA section 10.18b)
Annual allocation of $200,000 for each team (CBA section 10.19a)
Qualification for the CONCACAF Champions League allocation of $140,000 for each qualified team (roster rules)
Transfer or loan of player to another club outside of MLS allocation of up to $750,000 for each transfer or loan (CBA section 10.19e & roster rules)
Third Designated Player charge distribution (CBA section 10.19f)
Free agency compensation of $50,000 per net player loss (CBA section 29.7b)
Expansion Draft compensation of $50,000 for each player selected
MLS teams receive targeted allocation money for these reasons:
Annual allocation of $100,000 for each team (CBA section 10.19b)
December 2016 announcement of $1.2 million of additional targeted allocation money for each team
Teams may also pull forward and use immediately the $100,000 of targeted allocation money and $1.2 million of additional targeted allocation money designated for 2019
December 2017 announcement of up to $2.8 million of team-funded targeted allocation money for each team
All numbers are for 2018 season.
Uses
General allocation money can be used in several ways:
Reduce the amount that a non-Designated Player costs against the salary cap down to the league minimum salary ($67,500 in 2018).
Reduce the amount that a Designated Player costs against the salary cap down to $150,000.
Sign players new to MLS.
Re-sign an existing MLS player.
Off-set acquisition cost (loan and transfer fees).
In connection with the extension of a player's contract for the second year provided the player was new to MLS in the immediately prior year.
Trade it to another team.
General allocation money must be used within 30 days of the close of the third full MLS transfer window after it was acquired. If a quantity of general allocation money is not used within that timeframe, it is halved by the league.
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