Monday, 15 Apr 2024

Inside the MLS Salary Cap: What’s New for 2023?

league minimum mls

Major League Soccer is set to kick off its 2023 season on Feb. 25, and this year promises to be bigger and more exciting than ever. With the arrival of expansion club St. Louis City SC, a total of 29 teams will compete for the coveted MLS Cup championship. As teams gear up for the new season, let’s take a closer look at the latest updates to the MLS salary cap and roster spending rules for 2023.

MLS Salary Cap 2023: Inside the Numbers

According to the official release from the league, here are the key details regarding the salary cap for the 2023 MLS season:

  • The MLS salary cap, known as the Salary Budget, has been set at $5,210,000 per team. This represents a 6.33% increase from the 2022 cap.

  • The minimum salary for a senior-team player in MLS has been raised to $85,444, a 1.72% increase from last year.

  • The maximum salary cap hit for an MLS player has been raised to $651,250, a 2.44% increase from 2022. However, teams can utilize Allocation Money or the Designated Player rule to adjust this number.

  • The maximum salary for a Targeted Allocation Money (TAM) player has been set at $1,651,250, a 2.43% increase from last year. TAM allows teams to sign players who exceed the standard salary limit but don’t qualify under the Designated Player rule.

  • Teams can now convert up to $1,157,625 in player transfer revenues into General Allocation Money (GAM), which represents a 5% increase from the previous year.

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Key MLS Salary & Contract Terms You Need to Know

Allocation Money

Allocation Money is an essential tool for MLS teams to manage their salary budgets effectively. It can be used to cover transfer costs, re-sign current players, and adjust salary cap numbers to ensure compliance. There are two types of Allocation Money:

  • General Allocation Money (GAM): GAM can be used to decrease a player’s effective salary cap hit, either down to the league minimum or to $150,000 for Designated Players.

  • Targeted Allocation Money (TAM): TAM allows teams to pay down the cap hits of player signings whose salaries exceed the maximum cap but fall within the TAM threshold. It can also be used to free up a player’s Designated Player spot.

Both GAM and TAM can be used as trade assets in transactions between MLS teams.

Designated Player

In MLS, teams have the flexibility to sign up to three Designated Players with salaries exceeding the maximum cap hit of $651,250. These high-profile players do not count towards the team’s salary cap. The Designated Player rule, often referred to as the “David Beckham Rule,” was introduced in 2003 to enable the LA Galaxy to sign David Beckham.

Senior Roster

Senior Roster players, who occupy up to 20 spots per team, count against the MLS salary cap. If a team has fewer than 18 Senior Roster players, they will be charged the league minimum salary of $85,444 for each unfilled spot.

Supplemental Roster

Players occupying roster spots 21 through 30 are considered Supplemental Roster players and do not count towards the MLS salary cap. However, teams are not allowed to carry more than 10 Supplemental Roster players.

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FAQs

Q: Can teams exceed the salary cap?

A: No, teams must adhere to the designated salary cap and utilize mechanisms such as Allocation Money and the Designated Player rule to adjust their roster spending.

Q: What happens if a team exceeds the salary cap?

A: If a team exceeds the salary cap, they may face penalties or fines from the league.

Q: How often are the salary cap rules updated?

A: The league reviews and updates the salary cap rules annually to reflect the changing financial landscape and player market conditions.

Conclusion

As the 2023 MLS season kicks off, teams will have increased spending power thanks to the raised salary cap and updated roster spending rules. The introduction of St. Louis City SC brings even more excitement and competition to the league. With the allocation of General Allocation Money and Targeted Allocation Money, teams have the flexibility to assemble competitive rosters and attract top talent. The MLS salary cap continues to evolve, ensuring a fair and competitive playing field for all teams.

For more information on the latest MLS salary cap updates and player statistics, visit Pesstatsdatabase.