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The Union are close to the salary "cap"

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Allegedly.

Ron Chenoy-USA TODAY Sports

Deciphering MLS finances is like staring at the sun - it really hurts and could cause long term injury. But we have to risk it. Our NFL fan friends know almost to the dime how much cap space their beloved football team has to spend, and that seems like so much fun. I don't want to be on a bar stool talking to such a friend when he asks me how much cap space the Philadelphia Union have..."um, erp, well see, our Commissioner doesn't want us to know." Too embarrassing. We need to know.

First, let's look at what's unclear. MLS has a salary cap that they call a salary budget. I'm going to call it a cap because that's what sports fans understand. We don't get budgets. We don't like them in our personal life and we definitely don't like hearing about budgets from our sports teams. Next, although the MLS Players Union posts salaries of all MLS players, a base salary and a total guaranteed compensation, neither of those numbers actually reflect the budget, er cap, hit. Then there are more crazy rules. Only 18 to 20 of the players actually count against the cap. These players are on the senior roster. And players that make a lot of money are called Designated Players and their salary cap hit actually has a cap. And no, we don't know what that is yet for 2015. And then there is mysterious allocation money which is doled out to the teams like a form of manna to help teams achieve their cap number. And there's more, but I'll spare you. At the end of the day one has to make a lot of assumptions to guess where a team is against the cap.

After taking a lot of guesses, and very conservative ones at that, meaning I've erred on the side of the Union spending more than they likely spent, I've come to the conclusion that the Union are pretty close to the new cap of $3.74M. I estimate them at no greater than $3.66M of cap spend, leaving $76k of money to spend. When you add on the money that doesn't count against the cap I believe the Union have spent as much as they ever have spent constructing the roster.

Unfortunately, given the $60M influx of revenue from the TV deal, there's a good chance that they haven't kept up spending with the other teams. Time will tell, but here's how I have the Union salaries at this point.

Player Increase 2015 Estimated Guaranteed Compensation Estimated Salary "Cap" Impact
1 Maurice Edu! 10% $715,000 $465,000
2 Cristian Maidana! 8% $214,650 $465,000
3 Fernando Aristeguieta! $450,000 $240,000
4 Vincent Nogueira 8% $356,400 $356,400
5 Sebastien Le Toux 8% $283,838 $283,838
6 Andrew Wenger 8% $261,360 $261,360
7 Rais M'Bolhi 8% $259,200 $259,200
8 Steven Vitoria $250,000 $250,000
9 Conor Casey -25% $144,375 $144,375
10 Brian Carroll -25% $138,915 $138,915
11 Sheanon Williams 8% $140,940 $140,940
12 CJ Sapong 8% $120,960 $120,960
13 Michael Lahoud 8% $110,520 $110,520
14 Fabinho 8% $108,540 $108,540
15 Raymon Gaddis 100% $104,626 $104,626
16 Ethan White 8% $86,400 $86,400
17 Fred 8% $70,697 $70,697
18 Antoine Hoppenot 11% $60,440 $60,440
Off Budget Players (estimated)
19 Andre Blake^ 8% $122,040
20 Zach Pfeffer** 8% $91,800
21 Jimmy McLaughlin 8% $81,000
22 John McCarthy $50,000
23 Raymond Lee $50,000
24 Eric Ayuk $50,000
25 Eric Bird $50,000
26 Richie Marquez $50,000
27 Dzenan Catic $50,000
Totals $4,471,700 $3,667,210
** Homegrown Player
^ Generation Adidas player
! Designated Player

Here are a couple of big assumptions:

  • The average Union player got an 8% raise last year, but I gave a slightly higher raise to Edu for his new contract and a much higher raise to Gaddis for his. How much Edu actually makes is irrelevant from a cap perspective because his hit will be the Designated Player maximum. If I assume something like an average raise of 6% for non-special circumstances the numbers don't change all that much. An extra $33K of cap space is available.
  • I grew the Designated Player cap hit by 20%, same as the overall cap lifted, which would make the cap hit $465K for players older than 23 and $240K for younger players, like Aristeguieta.
  • I took down the salaries of Carroll and Casey by 25%. Curtin mentioned they couldn't be brought back at their 2014 salaries so I'm expecting a lower amount, but not a lot lower.
  • Newcomers were placed at the new non-senior roster player minimum of $50K and senior players like Hoppenot I moved up to at least $60K.

And a couple of observations

  • The healthy starting XI makes up $2.9 of the nearly $3.7M spent.
  • Maidana being revealed as a DP for a second season was an interesting revelation and has a big impact on the cap space. What puts him over the threshold has to be the amortized amount of his transfer fee. The gap between his compensation of $215K and the DP threshold of $465K is $250K. Let's say Maidana signed a 3-year deal with the Union. That means that the transfer fee must have been at least $750K (3 years times the $250K). That's a hefty fee paid.
  • The $4.47M in total spend does not include whatever transfer fee the Union paid to Stoke City. According to transfermkt.com Stoke City paid 630K Euro for Edu's services. It's unlikely they recouped that investment from the Union.
  • Given that transfer fee it's not unreasonable to assume the Union spent about $5M this year on players. That's not significantly higher than they have in year's past, if it's even higher at all.
I think the bottom line is that the Union won't being making any big player signings throughout the season without getting rid of players. They are capped on Designated Players and it appears they are near the salary cap in total. The MLSPU has historically published players salaries in April or May each year, so we'll know much more if and when that happens.