Roster Rules and Regulations
2016 MLS Player Rules and Regulations Summary
I. MLS ROSTER COMPOSITION
A Major League Soccer club’s active roster is comprised of up to 28 players. All 28 players are eligible for selection to each 18-player game-day squad during the regular season and playoffs.
In addition to the salary budget, each MLS Club spends additional funds on player compensation including money from a league-wide allocation pool (General & Targeted Allocation Money), the cost of Designated Players outside the salary budget, and money spent on the Supplemental and Reserve Rosters (players 21-28).
ON-BUDGET: SENIOR ROSTER
- Up to 20 players, occupying roster spots 1-20, count against the club’s 2016 salary budget of $3,660,000, and are referred to collectively as the club’s Senior Roster.
- Roster spots 19 and 20 are not required to be filled, and teams may spread their salary budget across only 18 Salary Budget Players. A minimum salary budget charge will be imputed against a team’s salary budget for each unfilled senior roster spot below 18.
- A Club may have no more than twenty (20) Players on its Senior Roster, subject to the Season-ending Injury Replacement, Disabled List, and loan exceptions.
- The maximum budget charge for a single player is $457,500.*
* See section entitled Allocation Money below for details on buying down a player’s budget charge.
OFF-BUDGET: SUPPLEMENTAL AND RESERVE ROSTERS
- The salaries of players on the Supplemental Roster (spots 21-24) and Reserve Roster (spots 25-28) do not count toward a club’s Salary Budget.
- Players occupying roster spots 21-24 do not count against the club’s salary budget, and are referred to collectively as the club’s Supplemental Roster. A Club may have no more than four Players on its Supplemental Roster, subject to the Season-ending Injury Replacement, Disabled List, and loan exceptions.
- Slots 21-24 may be filled with (i) Senior Minimum Salary Budget Charge Players ($62,500 in 2016) which may include Homegrown Players, (ii) Generation adidas Players, or (iii) any specifically designated Players eligible for the MLS SuperDraft.
- All Generation adidas players are Supplemental Roster players.
- All Players on the Supplemental Roster must be paid a base salary which is at least the Senior Minimum Salary: $62,500.
- Players occupying roster spots 25-28 may be filled with Players earning either (i) the Reserve Minimum Salary Budget Charge ($51,500 in 2016) or (ii) Homegrown Players earning more than the Reserve Minimum Salary Budget Charge.
- Reserve Minimum Salary Players must be 24-years-old or younger during the league year*.
- These slots may not be filled with Senior Minimum Salary Players or Generation adidas Players.
- All Players in slots 25-28 must be paid a base salary which is at least the Reserve Minimum Salary: $51,500.
* Age of player is determined by year (not date) of birth.
2016 Roster Compliance and Freeze Dates
- The 2016 Roster Compliance Date is March 1, 2016, at which time teams must be roster compliant heading into the start of the 2016 MLS season.
- The 2016 Roster Freeze Date is September 15, 2016, at which time teams must submit their final 28-man roster that cannot be changed through the day after MLS Cup.
II. PLAYER CATAGORIES ON THE ROSTER
In 2016, a total of 160 international roster spots are divided among the 20 clubs. In 2008, each MLS Club was given the right to have eight international players on their roster and expansion Clubs were given the right to have eight international spots for their inaugural season. These spots are tradable, in full season increments, such that some clubs may have more than eight and some clubs may have fewer than eight. There is no limit on the number of international roster spots on each club’s roster.
- U.S.-based Clubs: For U.S. Clubs, a domestic player is either a U.S. Citizen, a permanent resident (Green Card holder) or the holder of certain other special status (e.g., has been granted refugee or asylum status). There is no limit as to the number of U.S. Domestic Players on a U.S. Club’s Roster.
- Canada-based Clubs: For Canadian Clubs, a domestic player is either a Canadian Citizen or the holder of certain other special status (e.g., has been granted refugee or asylum status) (“Canadian Domestic Player”) or a U.S. Domestic Player. There is no limit as to the number of Canadian Domestic Players on a Canadian club’s roster.
- There is no limit as to the number of U.S. Domestic Players or Canadian Domestic Players on a Canadian club’s roster; provided, however, that a Canadian Club is required to have a minimum of three (3) Canadian Domestic Players on its roster at all times.
- U.S.-based Clubs: Any Player who does not qualify as a U.S. Domestic Player in a U.S. Club shall be considered an International Player, and must occupy an international slot on a U.S. Club’s Roster.
- Canada-based Clubs: Any Player who does not qualify as a U.S. Domestic Player or a Canadian Domestic Player shall be considered an International Player, and must occupy an international slot on a Canadian Club’s Roster.
Players signed through the Homegrown Player mechanism (see below in Player Acquisition Mechanisms) will receive the designation of “Homegrown Player” on a club’s roster.
- There is no limit to the number of Homegrown Players a club may sign in a given year.
- Homegrown Players may occupy a spot on the Senior, Supplemental, or Reserve Roster.
- If a Homegrown Player is initially added to a Club’s Supplemental or Reserve Roster and subsequently moved to the Senior Roster, he cannot be moved back to the Supplemental or Reserve Roster except if he is earning either (i) the Senior Minimum Salary Budget Charge or (ii) Reserve Minimum Salary Budget Charge.
- Homegrown Player(s) on either the Supplemental Roster or the Reserve Roster may earn (including achievable bonuses) in aggregate each year up to $125,000 above the Reserve Minimum Salary ($51,500 in 2016) or the Senior Minimum Salary ($62,500 in 2016).
Generation adidas is a joint program between MLS and adidas that is dedicated to developing exceptional domestic talent in a professional environment. Each year, a handful of top domestic collegiate underclassmen and youth national team players are signed by the league and placed in the SuperDraft through this program.
- Until a player graduates from the program, Generation adidas players are on a club’s Supplemental Roster and are not charged against the team’s salary budget.
The Designated Player Rule allows clubs to acquire up to three players whose total compensation and acquisition costs exceed the maximum budget charge, with the club bearing financial responsibility for the amount of compensation above each player’s budget charge. Designated Players may be new players signed to MLS via the Allocation Ranking List, Discovery Process or can be re-signed existing players on a team’s roster
In 2016, a Designated Player that is 24-years-old or older during the league year will carry the Maximum Budget Charge ($457,500) unless the player joins his club after the opening of the Secondary Transfer Window, in which case his budget charge will be $228,750.
A Designated Player 23 years old or younger during the league year will carry the following Young Designated Player Budget Charge:
- Ages 20 and younger: $150,000
- Ages 21-23: $200,000
- If such Designated Player joins the club after the opening of the Secondary Transfer Window, he will carry the Mid-Season Youth Designated Player Salary Budget Charge of $150,000 regardless of age.
Clubs may “buy down” the budget charge of a Designated Player with General Allocation money. The reduced charge may not be less than $150,000. Please see below for Allocation Money parameters.
Each MLS Club shall be allotted two Designated Player slots. Clubs with two Designated Players may add a third Designated Player by paying $150,000 to the league which shall be split among clubs with two or fewer occupied Designated Player slots for use as General Allocation Money the following MLS Season. If a club uses the third Designated Player slot to sign a Young Designated Player, then the Club will not be obligated to pay the $150,000 charge.
Designated Player spots are not tradable.
** Age of player is determined by year (not date) of birth.
Special Discovery Players: In general, the total amount of the acquisition cost of a player is charged against the salary budget in the year in which it is paid. For one player on a club’s roster (a “Special Discovery Player”), a club is able to amortize the total amount of acquisition costs (up to $500,000) over the term of the player’s contract.
- Special Discovery Players must be 27-years-old or younger during the league year under consideration.
- There may be no more than one Special Discovery Player per number of clubs in the league (i.e. 20 total Special Discovery Players in 2016).
- A club may have more than one Special Discovery Player on its Senior Roster at any given time if the club received the additional player(s) via trade. However, the Club trading the Special Discovery Player may not sign a new Special Discovery Player until the traded Special Discovery Player’s original SPA expires, the player’s contract is terminated, or all the amortized acquisition costs are accounted for in the Budge Charge.
III. PLAYER ACQUISITION MECHANISMS
MLS teams may acquire players and add them to their rosters via the following mechanisms:
(A) ALLOCATION PROCESS
The Allocation Process is the mechanism used to determine which MLS Club has first priority to acquire a player listed on the Allocation Ranking List. The list will consist of (i) select U.S. Men’s National Team players, (ii) elite youth U.S. National Team players, or (iii) former MLS players returning to MLS after joining a non-MLS club for a transfer fee greater than $500,000. Generally, the Allocation Ranking List will be updated once a year on the day after the conclusion of the MLS regular season. The Allocation Ranking List will only be edited during the year if a player is transferred out of the league or if a top youth national team player is added to the list.
The Allocation Ranking Order is set by taking the reverse order of the club’s standings at the end of each MLS Season, taking playoff performance into account, with the new expansion clubs at the top of the order.
Once the club uses its allocation ranking to acquire a player, it drops to the bottom of the list. A ranking can be traded, provided that part of the compensation received in return is the other club’s ranking. At all times, each club is assigned one ranking. The rankings reset at the end of each MLS League season.
Any updates to the Allocation Ranking List or Allocation Ranking Order will be reflected at http://www.mlssoccer.com/allocation.
The 2016 MLS SuperDraft consisted of four rounds for a total of 81 player selections. The first two rounds took place on Jan. 14 in Baltimore and the final two rounds took place on Jan. 19 via conference call.
The majority of draft prospects are NCAA college seniors who have exhausted their college eligibility. Generation adidas players and non-collegiate international players are also eligible for selection in the SuperDraft. Clubs may nominate players for the League’s Draft-Eligible List, and only players from that list may be selected.
The SuperDraft order is set by taking the reverse order of the club standings at the end of each MLS season, taking postseason performance into account, with new expansion clubs at the top of the order
Unless claimed on waivers, a player who was drafted by a particular team through the SuperDraft and did not sign with the League, is placed on that team’s “College Protected List” until December 31st of the year after the draft, after which the team loses the priority to sign the player.
Players, SuperDraft picks, General and Targeted Allocation Money, Allocation Rankings and International Player Slots may all be exchanged in trades approved by the MLS League Office, provided all of the necessary rules regarding roster and salary budget compliance are met and the trade is completed during a valid trading period.
During the season trades that involve players must occur during either the Primary Transfer Window (2016: February 18 – May 11) or Secondary Transfer Window (2016: July 4 – August 3).
(D) DISCOVERY PROCESS
Pursuant to the Discovery Process, clubs scout and sign players who are not yet under contract to MLS and who are not subject to another assignment mechanism (e.g. Allocation Process, SuperDraft). To sign a player through the Discovery Process, the club must first place the player on its Discovery List. A club may have up to seven unsigned players on its Discovery List at any time and may remove or add players at any time. There is no limit to how many players a club can sign from its Discovery List.
Clubs may not add the following players to their Discovery Lists:
- Players on the Allocation Ranking List
- Players that have played in MLS and were subsequently waived or terminated (such players are available on a first-come, first-served basis)
- Players for whom another club has Right of First Refusal
- Players that played at college or forwent college during the college season immediately prior to the date of discovery. (If a player has completed or forgone his College eligibility in the season immediately prior to the date of his Discovery and was not on the MLS SuperDraft List, he shall be placed on Waivers.)
- Minors: players under the age of 18
- Amateur members of the U.S. U-17 and U-20 National Team. MLS shall have an exclusive 45-day window after such players reach their 18th birthday or graduate high school (whichever is later) to determine if these players will be signed for the SuperDraft or be placed on the Allocation Ranking List.
- Players who the league (1) unsuccessfully attempted to pre-sign for the SuperDraft (2) did not attempt to sign for the SuperDraft, (3) are not on the Allocation Ranking List, or (4) do not enter college will be non-discoverable for up to one year after forgoing college and will be placed on Waivers.
Discovery Conflict Resolution: If one or more clubs try to add the same player to their Discovery Lists, the club that filed the claim first will have the priority right to sign the player. If one or more clubs submit a discovery request on the same day, then the club with the lowest points-per-game in the current MLS regular season (all clubs must have played a minimum of three regular season games) will have the priority right to sign the player.
If a club attempts to sign a player on its Discovery List and is unable to do so, the club retains the Right of First Refusal to acquire the player in the event he is later signed by the League for four full Transfer Windows.
If a club wants to sign a player on the Discovery List of another team, it may offer that team $50,000 in General Allocation Money in exchange for the right to sign the player. The team with the player on its Discovery List will then either (i) have to accept the General Allocation Money and give up the right to sign the player or (ii) make the player a genuine, objectively reasonable offer.
(E) HOMEGROWN PLAYER SIGNINGS
A club may sign a player to a contract without subjecting him to the MLS SuperDraft if the player has been a member of a club’s youth academy for at least one year and has met the necessary training and retention requirements. Players joining MLS through this mechanism are known as Homegrown Players.
There is no limit to the number of Homegrown Players a club may sign in a given year.
(F) USL PRIORITY PLAYERS
In addition to Homegrown Players and College Protected Players – clubs may have priority for up to three players from their USL affiliate. In order to retain priority on any additional USL affiliate players, such players must be added to an MLS club’s Discovery List.
(G) RE-ENTRY PROCESS
The Re-Entry Process will commence after MLS Cup. The priority order for the Re-Entry Draft is reverse order of finish in 2016, taking into account playoff performance.
Players who are available in Stage One of the Re-Entry Draft are:
- Players who are at least 23-years-old and have a minimum of three MLS service years whose options were not exercised by their clubs (available at option salary for 2017).
- Players who are at least 25-years-old with a minimum of four years of MLS experience who are out of contract and whose club does not wish to re-sign them at their previous salary (available for at least their 2016 salary).
- Free Agents that choose to participate
Clubs must exercise the option for, or extend a Bona Fide Offer to, all players selected in Stage One and may not select their own draft-eligible players. Should a player reject the offer, the drafting club will hold the Right of First Refusal for that player in MLS. Players with option years left on their contract will automatically be added to the drafting club’s roster.
Players who are not selected in Stage One of the Re-Entry Draft will be made available in Stage Two. If a player is selected, the drafting club will be required to make a genuine offer to the player within seven days. In the event that an agreement cannot be reached between the drafting club and the player, the drafting club will hold the Right of First Refusal for that player in MLS. Clubs may not select their own draft-eligible players in Stage Two until all other Clubs have declined on selecting such players.
Players who remain unselected after Stage Two will be available to any MLS club on a first-come, first-served basis.
A player may choose to opt out of the Re-Entry Process prior to Stage One and/or Stage Two of the Re-Entry Draft. In such instances, the Right of First Refusal for the Player will remain with his previous club.
(H) FREE AGENCY
Players 28-years-old and older with eight years of MLS service who are out of contract, or have not had their option exercised, are eligible for Free Agency in 2016, allowing them the freedom to negotiate a new contract with any MLS club, including their previous club, subject to certain restrictions. A player has fulfilled a year of service if he was on a club’s roster prior to August 15 or played in at least one regular season or postseason game in the relevant year.
A club may place a player on Waivers at any time during the regular season at which point he is made available to all other clubs. The Waiver Claiming Period shall commence on the first business day after the League delivers notice to teams and expires at 5 p.m. ET on the second business day. If a player is not selected off of Waivers (“clears Waivers”) then that player is available to all clubs on a first-come, first-served basis.
The Waiver Order is based on points per game once all clubs have played at least three MLS League games. If the Waiver takes place prior to all clubs playing in at least three League games, priority is granted based upon the prior year’s performance, taking playoff performance first, with clubs eliminated from playoff contention at the same stage separated according to their point totals through the end of the regular season. New expansion clubs shall be at the bottom of the Waiver Order until all clubs have played at least three games.
Claiming an Out of Contract Player
If a club claims a player who is not currently signed to an MLS contract, the club must issue the player a Genuine Offer within three days.
Claiming a Guaranteed Player
If a player with a guaranteed contract is waived, any interested MLS club will have 48 hours from the notice of waivers to claim the player by notifying the League Office of the intention to claim the player and the amount of the player’s salary budget charge. The player will be awarded to the club willing to absorb the highest salary budget charge. In the event that the highest salary budget charge is submitted by more than one club, the player will be awarded to the club with the lowest points per game average.
Players who are eligible to be placed on Waivers are as follows:
- Any player waived by an MLS club during the current MLS season
- Completed College Eligibility: Any player who has completed his college eligibility in the MLS season immediately prior to the MLS SuperDraft and was not on the SuperDraft list.
- Remaining College Eligibility: A player who left or forgoes college with remaining eligibility (and was not on the MLS SuperDraft list). Such players will be discoverable one year after leaving or forgoing college with remaining eligibility.
- Returning Players: A player returning to MLS who the league was unable to re-sign and his last MLS club does not wish to exercise their Right of First Refusal.
- Unsigned Drafted Players: The day after the drafting club’s first MLS regular season game, college players selected in that year’s SuperDraft that have not signed an MLS contract have the right to be placed on waivers upon request. If an unsigned college player is placed on waivers, and is not claimed by another MLS Club, he will return to his drafting Club’s College Protected List until the end of the College Protected Period.
- Any player whose contract has expired or option has been declined, is not eligible for the Re-Entry Process or Free Agency, and their former club does not wish to make them a genuine offer. Such players will be typically made available in a yearend Waiver Draft or prior to the start of the next MLS league season.
In the event a player is claimed by more than one club during the Waiver Claiming Period, the League shall award the player to the club with the lowest points-per-regular-season game average at the time the player is placed on waivers
Once a club selects a player off Waivers, that club is automatically moved to the bottom of the priority list for subsequent waiver selections in a given season, regardless of its points-per-game total.
(J) USL SHORT TERM AGREEMENTS
MLS clubs may sign players from their USL affiliate to Short Term Agreements (up to four-day contracts) for CONCACAF Champions League, AMWAY Canadian Championship, U.S. Open Cup, and exhibition matches. An MLS club may sign a player to a maximum of four short term agreements each season (maximum of 16 days).
Players may also be signed to Short Term Agreements for MLS league season games but only in cases of Extreme Hardship.
(K) EXTREME HARDSHIP CALL-UPS
Clubs may add players to their roster in cases of “Extreme Hardship.” Extreme Hardship exists when an MLS club has fewer than 15 total players available or when an MLS club with three goalkeepers on its roster, has fewer than two goalkeepers available.
If a club has three goalkeepers on its roster, and in the event that two of its goalkeepers are unavailable, and further provided that the club does not have an available roster spot, that club may sign an additional goalkeeper to a short term contract.
USL Player Short Term Agreements in cases of Extreme Hardship
Clubs may sign players, 25-years-old or younger, from their USL affiliate (on loan) to a Short Term Agreement (up to four-day contracts) for MLS league season games only in cases of Extreme Hardship.
An MLS club may sign a player to a maximum of four Short Term Agreements each season (maximum of 16 days). During such time, the player may play in any U.S. Open Cup games, CONCACAF Champions League games, and exhibition games.
(L) SEASON-ENDING INJURY REPLACEMENTS (Season-ending Injury List)
In the event a player suffers a season-ending injury, a club may place that injured player on the Season-ending Injury List and receive roster relief (i.e. an open roster spot). Once placed on the Season-ending Injury List, the injured player will not be eligible to play for the club in any remaining competition during that MLS season (including any exhibition games or tournaments, CONCACAF Champions League, AMWAY Canadian Championship and U.S. Open Cup game).
Clubs that have, or can create, extra budget space may fill the open roster slot with a replacement player, a “Season-ending Injury Replacement Player”.
In the event the injured player occupies an International slot, the Season-ending Injury Replacement Player may also be an International Player and occupy such slot.
In the event that a player placed on the Season-ending Injury List recovers prior to the end of the MLS season, that player may only play in games for the club’s USL affiliate.
Budget Charge for Season-ending Injuries
The club will remain responsible for the injured player’s full Salary Budget Charge. Clubs may execute a trade to create budget space in order to sign a Season-ending Injury Replacement Player. This is the only circumstance in which a club may trade for Salary Budget space.
MLS clubs are only able to receive budget relief (paid out of the club’s own pocket) for a season-ending injury under the following parameters:
- The injured player must be earning at least $100,000 per annum but not greater than $250,000 per annum.
- The injured player must have suffered the season ending injury prior to the close the Primary Transfer Window and the new player must be signed as of such date.
- The club is ultimately responsible for the payment of the replacement player’s salary (which will not be charged to the club’s budget).
- MLS clubs will only be allowed to sign one such Season-ending Injury Replacement Player a year.
Supplemental and Reserve Season-ending Injury
In the event a Player on a club’s Supplemental or Reserve Roster suffers a Season-ending Injury, a club may replace that injured player with a player earning the Reserve Minimum Salary irrespective of the salary earned by the injured player (i.e., if a Generation adidas Player earning more than the Reserve Minimum Salary is injured, he may be replaced by a Player earning the Reserve Minimum Salary (subject to the Club Salary Budget). The Reserve Minimum Salary will be charged to the Club Salary Budget.
Accordingly, a Club must have salary budget space to replace a Player with a Season-ending Injury on the Supplemental Roster with a Season-ending Injury Replacement Player.
An international player occupying an international slot who is added to the Season may be replaced with an international player.
(M) SHORT-TERM INJURY REPLACEMENTS (Disabled List)
In the event a player suffers an injury that will prohibit him from participating in six or more MLS games, a club can place that injured player on the Disabled List. An injured player placed on the Disabled List will remain unavailable for a minimum of six MLS games and may not participate in any exhibition games or tournaments, including CONCACAF Champions League, AMWAY Canadian Championship and U.S. Open Cup games.
Senior Roster Players on the Disabled List
If a player on a club’s Senior Roster is put on the Disabled List, the club may receive roster relief (i.e. an open roster slot). The club will not receive budget relief for that player and will be responsible for the injured player’s full salary budget charge. Only clubs that have or can create extra salary budget space will be able to temporarily replace players on the Disabled List. A club must have priority over any replacement player it adds (Discovery, Right of First Refusal, etc.)
An international player occupying an international slot who is added to the Disabled List may be replaced with an international player.
Clubs may not trade for salary budget space for a player added to the Disabled List.
Supplemental and Reserve Roster Players on the Disabled List
In the event a player on a club’s Supplemental or Reserve Roster suffers an injury that will place such Player on the Disabled List, the club may replace the injured player with a player earning the Reserve Minimum Salary irrespective of the salary earned by the injured player (e.g., if a Generation adidas Player earning more than the Reserve Minimum Salary is injured, he may only be replaced by a Player earning the Reserve Minimum Salary (subject to the Club Salary Budget)). Such Reserve Minimum Salary will be charged to the Club Salary Budget. Therefore, a Club must have Salary Budget space to replace the injured Player on the Supplemental or Reserve Roster with a Disabled List Replacement Player. The Club must also ensure it has the necessary Roster space and Club Salary Budget available when the Player is removed from the Disabled List.
NOTE: No changes may be made to a club's roster during the period beginning on September 15, 2016 (day after Roster Freeze Date) through the day after MLS Cup. Nevertheless, a team may obtain players in accordance with the Extreme Hardship rules and procedures to replace players who are injured or otherwise legitimately unavailable after the Roster Freeze Date.
(IV.) METHODS OF RELEASING PLAYERS
Clubs may waive players based on performance at any time during the MLS season. A club may waive a Semi-Guaranteed Player at any time during the regular season until 48-hours prior to the Contract Guarantee Date. A club may waived a Guaranteed or Semi-Guaranteed Player after the Contract Guarantee Date only with League approval. Clubs may not waive a player between the Roster Freeze Date and MLS Cup.
Semi-Guaranteed Players waived on or after the Contract Guarantee Date of any League year and Guaranteed Players waived anytime, and who clear waivers (i.e. not picked up by another club), will continue to have their Salary Budget Charge count against the Club Salary Budget. The club waiving the player will not receive a replacement player except through the Discovery Process.
(B) TRANSFERS AND LOANS
An MLS player may be transferred or loaned at any time to a non-MLS club (subject to that club’s Federation’s transfer window), and subject to the consent of the player. Upon loaning a player, clubs will receive roster relief and budget space, subject to the terms of the loan.
The registration windows – the dates between which MLS may request the transfer certificate of a player under contract in another country – are as follows:
Primary Transfer Window - February 18 – May 11, 2016
Secondary Transfer Window - July 4 – August 3, 2016
Transfer and Loan Fees
The revenue share from transfers or loans for clubs is as follows:
- A club shall receive two-thirds (2/3) of the corresponding transfer or loan fee revenue (including agent fees and other expenses), from any transaction involving a player that is NOT a Homegrown Player, Generation adidas Player, or player acquired via the MLS SuperDraft.
If a Designated Player is transferred or loaned, the club will receive all amounts of the transfer or loan fee revenue until it has recouped all of the out-of-pocket cash payments made by the club in connection to that player prior to any sharing arrangement with the league. After such recoup, the transfer or loan of the Designated Player shall be treated as any other transfer with the club receiving two-thirds (2/3) of the corresponding transfer or loan fee revenue
- A club shall receive three-fourths (3/4) the corresponding transfer or loan fee revenue (including agent fees and other expenses) from any transaction involving a Homegrown Player (regardless of service years).
- A club shall receive the transfer or loan fee revenue (including agent fees and other expenses) from any transaction involving a Generation adidas Player or player acquired via the MLS SuperDraft based on the number of MLS service years:
MLS Service Years
Transfer/Loan Fee Revenue to Club
All remaining portions of the transfer or loan revenue fees are retained by the league.
Usage of Revenue
The club’s share of transfer or loan fee revenue may only be used as follows:
- The club may assign up to $650,000 of the transfer/loan revenue as General Allocation Money. (In the case of Designated Players, such assignment of Allocation Money can only take place after the club has received 100% of their out-of-pocket investment)
- The remaining balance of the club’s share (if any), and which cannot be traded, will be available to be used by clubs in the following ways:
- Against the expenses incurred by the club in relation to the costs of an existing or new Designated Player
- With league approval, clubs can use the revenue against an expense that would (i) would not otherwise have been incurred by the club; and (ii) reasonably represents an investment in the league or club (e.g. youth development and training facilities).
Teams may loan a player to another MLS club subject to the following:
- The player must be 24 years old or younger at the time of the loan.
- Each MLS club may only loan one player to another MLS club per season.
- The loan must be initiated during the Primary or Secondary Transfer Window.
- The player must remain with his new club for the entire MLS Season.
- The player may not compete against his former club during the MLS Season while on loan (includes MLS games and all other competitions).
- Intraleague loans may include an option to make them permanent.
Loan of a Player by MLS
A club may loan any player from its Senior, Supplemental Roster or Reserve Roster to a non-MLS club at any time during the league year under consideration, subject to league discretion. During the loan period, the club will receive roster relief but not salary budget relief unless otherwise determined in the loan agreement.
If the player is recalled from his loan, the club must have an available roster slot in order for the player to be eligible for MLS games.
If the loaned player is an International Player, then his replacement may be an International Player and occupy an international roster slot.
Loan of a Player by MLS to USL Affiliate
- All loans from MLS clubs to USL affiliates must be free (i.e. no loan fees paid by USL affiliate clubs).
- In the event that an MLS player is loaned to a USL affiliate club, such player may not be paid in excess of the player’s MLS budget charge without that compensation being captured on the MLS club’s Salary Budget (including, but not limited to, performance bonus compensation).
- An MLS club can receive roster relief and budget relief for a maximum of one player loaned to its USL affiliate; provided, however, that:
- The player is under the age of 25 (i.e., he does not turn 25 prior to the end of the calendar year);
- The player’s total compensation is less than or equal to the MLS Senior Minimum Salary (including any loan fees, transfer fees, agent fees, housing, car, etc.); and
- The loan of the player to the USL affiliate must last for the duration an entire USL season; provided, however, that in the event that such loaned player is a goalkeeper, he may be recalled to his parent MLS club only in the case of Extreme Hardship.
Right of Recall
If a player is loaned from a MLS Club to a USL affiliate with a Right of Recall incorporated into the agreement, then that player may be recalled by the parent MLS Club at any point during the MLS regular season subject to MLS roster compliance guidelines (e.g. available international slots, roster space). There are no restrictions on the amount of time such player may be recalled.
(C) CONTRACT EXPIRATION
When a player’s contract expires, the player no longer counts against the roster or budget of the club in question. Subject to the Re-Entry and Free Agency rules, a club retains the Right of First Refusal on the player indefinitely following the expiration of a contract provided attempts were made to re-sign the player.
(D) BUYOUT OF GUARANTEED CONTRACT
A club may buy out one player who has a Guaranteed Contract (including a DP’s) during the offseason and free up the corresponding budget space. Such a buyout is at the MLS club’s expense.
A club may not free up room in the salary budget with a buyout of a player’s contract during the season. In the case a team buys out a player’s contract during the season, the buyout amount will be charged against the club’s salary budget.
(V.) RIGHT OF FIRST REFUSAL
Former MLS Player
In the event a former MLS player, who the league previously attempted but was unable to re-sign, returns to MLS, his former club will have a Right of First Refusal (ROFR).
That club will not have a Right of First Refusal if:
- The club received General Allocation Money in connection with the transfer of such player to a non-MLS club; or
- The transfer fee for the player was greater than $500,000 (Player would return to MLS via Allocation Process); or
- The transfer fee for the player was less than $500,000 (Player would return to MLS via Discovery Process)
If the League on behalf of an MLS club makes a genuine offer to a new player but is unable to sign him, the MLS club will have a Right of First Refusal (ROFR) in the event the player later signs with MLS. This process applies to players the league attempts to sign. If the player is subsequently signed, and the club does not exercise its ROFR, the player will be assigned via the Waiver Process unless otherwise determine by the league depending on the type of player.
For a new player the league attempted to sign through the Discovery Process, the Right of First Refusal will last for four full transfer windows. Upon the conclusion of the four (4) full transfer windows, that player will be Discoverable again.
For those players on a clubs Right of First Refusal list and who were previously on a team’s Discovery List, the Discovery Conflict Resolution Process shall apply (e.g. posting of $50,000 in General Allocation Money).
Holding a Right of First Refusal applies only within MLS and does not indicate holding of the player’s International Transfer Certificate.
College Protected Player
A player who was selected in the SuperDraft, provided his club offered him a contract and the contract offer was refused by the player. In the event his team does not offer him a contract after being on trial, the player will have the option to be placed on Waivers on the date following the drafting club’s first Regular Season game. If no club is prepared to sign him off Waivers, the player will be placed on the drafting team’s “College Protected List” until the December 31 in the year following the draft in question, after which date the team loses the rights to sign the player.
(VI.) ALLOCATION MONEY
General Allocation Money
General Allocation Money is money that is available to a club in addition to its salary budget. Each MLS club receives an annual allotment of General Allocation Money. In 2016, that allotment is $150,000 per club.
A club will also receive Allocation Money in the following cases:
- Failure to qualify for the MLS Cup Playoffs.
- The transfer of a club’s player to another club outside of MLS.
- Qualification for the CONCACAF Champions League.
The League will also provide all clubs that don’t have a third Designated Player an equal amount of General Allocation Money from the funds collected by the League for the purchase of the third Designated Player spots (as described further below). In any year that the League adds an expansion club or clubs, (i) all clubs will receive an equal amount of General Allocation Money and (ii) any club that loses a player in the expansion draft will receive additional General Allocation Money. New expansion clubs receive a separate amount of General Allocation Money for their inaugural season.
General Allocation Money can be traded by clubs. Allocation Money can be used to “buy-down” a player’s salary budget charge as part of managing a team’s roster, including buying a salary budget charge below the League maximum of $457,500. For example, a team may “buy down” a player earning $475,000 to a budget charge of $275,000 by using $200,000 of General Allocation Money.
General Allocation Money can also be applied in the following circumstances:
- 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.
- To off-set acquisition costs (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.
- To reduce the Salary Budget Charge of a Designated Player to a limit of $150,000.
Use against a Salary Budget Charge: A club cannot use General Allocation Money to reduce more than fifty percent (50%) of a player’s Salary Budget Charge. This restriction does not apply where General Allocation Money is being used on a loan or transfer fee. A club may reduce one hundred percent (100%) of a loan or transfer fee.
Targeted Allocation Money
Announced on July 8, 2015, each MLS club will receive $100,000 per year for the next five years ($500,000 total) in additional funds, referred to as Targeted Allocation Money, to invest in their roster outside of the player salary budget. In addition, each club will receive $800,000 in Targeted Allocation Money in 2016.
Targeted Allocation Money may be used in four ways:
- Clubs may use the funds to sign a new player provided his salary and acquisition costs are more than the maximum salary budget.
- Clubs may re-sign an existing player provided he is earning more than the maximum salary budget.
- Clubs may use a portion of or all of the available Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down 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.
- A club retains the flexibility to convert a player bought down with Targeted Allocation Money into a Designated Player if that club has a free Designated Player slot.
- Clubs may trade their Targeted Allocation Money to another club.
Salary Parameters: A Player must earn more than $457,500 per year (2016 maximum budget charge) to qualify for Targeted Allocation Money. The compensation ceiling for such players is set at $1,000,000 per year, except as follows: if a Designated Player is converted to a non-Designated Player through the use of Targeted Allocation Money during the Secondary Transfer Window, that player may earn a maximum of $1,500,000 on a prorated basis.
The minimum budget charge for a player compensated with Targeted Allocation Money is $150,000.
MLS clubs may bring forward a portion or all of their allotted Targeted Allocation Money, up to $1,300,000, to be used in a single season.
Targeted Allocation Money and General Allocation Money may not 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.
While MLS clubs are not required to use their initial pool of Targeted Allocation Money $100,000 each season (through to 2019), they are required to use the remaining amount (of the annual $100,000) during the following 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.