TAM sweet TAM. The new elixir of MLS. The more I contemplate TAM and all the honey it adds to my afternoon tea, the more I realize its brilliance. MLS and brilliance. Two terms that are rarely written together, but there it is. Marvel at the thought, but don't be fooled. This isn't the British everyday overused version of the word brilliant. This is solid, hard-working, American, true-to-the-meaning brilliance.
Before we face New York and begin praising TAM, let's talk about what it is and what's just happened. TAM is an acronym for Targeted Allocation Money, not to be confused with regular old Allocation Money, because never the twain shall meet. TAM is a restricted currency doled out by the powers that be at MLS headquarters, and it's quickly passed Bitcoin as my favorite currency. Sorry dollar. You are number three.
TAM can be used by teams to sign up to three players that make roughly between $450,000 and $1,000,000 per year. There are other rules that you can read in the announcement but that's essentially how it needs to be used. The big news is that MLS just gave $1,600,000 to each team over the next two seasons to sign said players. Teams get $800,000 this year and it must be spent by the summer of of 2017. They get another $800,000 in 2017 that they'll need to use by the summer of 2018. That money is to be used to buy down a player's salary over the maximum budget for a player, which will be $457,500 in 2016. For example, a team could buy three players at a $700,000 salary each, and could be charged less than the maximum player budget for those players. And this example fails to account for the fact that teams already have some TAM in their pocket.
How big is this? To put that $1,600,000 in context, the entire salary budget last year was $3,490,000. So MLS just increased that budget by nearly 25%, out of the blue. While you were trying to get through another boring day at work or school. Ping. A push notification. Game changer. Brilliant too. Let's not forget.
So let's talk about that brilliance. Just what's so great about this TAM? After all, we've had Allocation Money for years and that just hurts our brains and frustrates us fans. TAM is different. TAM is wonderful.
Quickly let's go back to the latest CBA and discuss some of the criticisms. First we must remember Don Garber's stated objective of MLS being one of the best leagues in the world by 2022. If you recall, the CBA resulted in a 2015 salary budget of $3,490,000 with paltry 7% annual increases, and that impressed absolutely no one. Don was called out for a clear lack of commitment to his own stated objective. Players were outraged. Fans doubted the owners' commitment to growing the league as promised.
One of the challenges Garber was and is facing in achieving the goal is the need to increase investment in players without giving it to the existing players. Giving money to the current players would be inefficient. The league would not really improve, yet the owners would still be spending more money. The goal most certainly was to give the new money to new players who would improve the quality of the league. TAM in effect does that. While teams can use the money to re-sign existing players there's just not that many players for whom that would make sense. The reality is the teams will be bringing in 2 or 3 new players that will be relatively high quality, and will be certain to start for their teams. Existing players will get their standard raise and keep playing. The low salary budget keeps existing contracts low while TAM expands the funds for new, more expensive players.
There are clear examples of this from last summer when sweet TAM first graced our presence. TAM indirectly allowed the LA Galaxy to sign Giovani Dos Santos by buying down the contract of of Omar Gonzalez with the elixir. The cash-strapped Union used it to sign Tranquillo Barnetta. Pretty big signings, thanks be to TAM.
The second piece of TAM brilliance is the transparency. Fans know exactly what each team gets. MLS can trumpet large numbers like investing $37M in new players! Just to be clear the $37M also includes $125,000 per team to be invested in Homegrown Players, which is like a syuper targeted version of TAM but just for local players. Meanwhile, regular boring old Allocation Money is still a black box. AM is more flexible funny money but fans don't really know how teams use it or how much they have. MLS is infamous for their lack of transparency. With TAM they can brag about progress.
Another piece of brilliance is that it projects the message of league parity. See, all teams get an equal and bountiful amount of TAM. Everyone has renewed hope that their FO will use this free money on game-changing players. I'm not fully buying in yet. The rich still have their advantage and this might even give them more. The teams with deep pockets can now have up to six players that would have originally been considered Designated Players from a salary perspective. The teams with lower budgets likely won't be able to keep up the pace regardless of TAM. But don't worry about that now, because MLS cares about all of your teams equally.
Lastly, TAM takes the pressure off of owners to pay out of their pocket. They can now go out and get big signings and not pay a dime. Owners pay out of pocket for Designated Players but with TAM they just sign the players and forget it. Sweet, sweet TAM.
And let's not be fooled by the three-year limit on this spend. There is no way MLS will start pulling it back. We're not going backwards. TAM will be there to guide us from here on out. TAM might be the restricted money that bridges MLS from here to there - from afterthought to league of choice. Will $800,000 do it? Of course not. But TAM is the great unknown hope. We never know when MLS might drop some more TAM. It is now the unpredictable and beautiful elixir that cures all ills.
While you were trudging through another day of work, a tremor was felt in the world of soccer. Major League Soccer was busy being brilliant. Meanwhile, across Europe and South America, more than a few agents and players looked up to see what just happened.