MLS announced Friday that it will increase the amount of Targeted Allocation Money available for use by each club from $1.2 million to as much as $4 million in 2018 and ‘19.
The $1.2 million available to each club is funded by the league. The remaining $2.8 million, if used, must come from each club.
Targeted Allocation Money has many uses in paying higher salaries to reward either deserving players or recruiting players. It can also be used to pay down a portion of the salary of a Designated Player to acquire another Designated Player.
In 2017, Atlanta United used TAM on Carlos Carmona, Leandro Gonzalez Pirez, Chris McCann and Brad Guzan.
Atlanta United, for example, could apply TAM to buy down the salaries of Josef Martinez and Hector Villalba in its reported pursuit of Argentinian playmaker Ezequiel Barco.
More about TAM, from the league:
• The minimum salary budget hit for a player who is bought down with TAM is $150,000.
• Discretionary TAM cannot be traded.
• Targeted Allocation Money may be used to sign new or re-sign existing players whose salary and acquisition costs are more than the maximum salary budget charge but less than $1.5 million.
• Clubs may use up to $200,000 of their currently available Targeted Allocation Money to sign new Homegrown Players to their first MLS contract, subject to League review and approval. Targeted Allocation Money cannot be used on a Homegrown Player previously signed to MLS.
• Targeted Allocation Money may be used to convert a current Designated Player to a non-Designated Player by buying down, on a prorated basis, his salary budget charge to at, or below, the maximum salary budget charge. If Targeted Allocation Money is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.
• Targeted Allocation Money and General Allocation Money cannot be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player. Either Targeted Allocation Money or General Allocation Money may be used on a player in a single season, not both.