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MLS Capology: Where the Union (might) stand with the salary cap

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MLS Capology 101 and a take on what the Union might be up to this summer.

Derik Hamilton-USA TODAY Sports

MLS Capology is a fools errand. Don Garber & Co. make sure of this. One part science and eight parts art, MLS Capology is a gathering of ancient press releases, odd bits of rumor and fact sheets only found by the best search engines. MLS doesn't even call it a salary cap. It's called a "salary budget." But whatever, it's a cap and we can't let this get in the way of understanding what our beloved Union might be up to and how much space they have to work with.The MLS players salaries were released late last week by the MLSPU and from this document we can begin to paint the salary cap picture, abstract as it may be.

First let me just drop it all on you and then I'll start to try to make sense of what's here:

mls capology

The first thing to note is that the Union so far plan to spend about $5.5M compensating players this season (first number in the green box). That's good for 15th highest payroll in the league (not factoring in any adjustment for allocation money or loans) and about a quarter the size of MLS wage leaders New York City FC and Toronto FC. Steve Fenn (@StatHunting) made this excellent visual of MLS player salaries that highlights where the Union rate just on base salaries.

steve fenn visual

Let's now go left to right on the table. The second column designates a potential roster configuration. Only Senior Roster players count against the salary cap of $3.66M. A team may use between 18 and 20 spots on their roster. After that they may designate Supplemental Roster players and Reserve Roster players that don't count against the cap. You can read the various rules here but Generation adidas players, of which the Union have three, can be added to the Supplemental Roster and there is no doubt that's where the Union have them. I also assumed Eric Ayuk on the Supplemental Roster as a senior minimum salary roster player. The last three players would only qualify for the Reserve roster because they make less than the senior minimum of $62,500. So this might be off a tad but it's likely pretty close.The Union should have 19 players on their senior roster counting against the cap.

The next column looks at roster designations like Designated Players, players who were acquired with TAM (Targeted Allocation Money) and Generation Adidas Players. I would have also tagged Homegrown players here but the Union don't currently have any. That's too bad ,because they too do not count against the cap and definitely are a competitive disadvantage in that regard.

Maurice Edu is the lone Designated Player right now. Given that, we can surmise that Tranquillo Barnetta, whose salary exceeds the MLS Budget Maximum per player of $457,500 this season, must be paid down with TAM or GAM. I'm going to assume TAM as that's what they used last year to sign him and rules stipulate a team can't combine the two for one player. We know that Ilshino and Roland Alberg were also acquired via TAM thanks to the press releases. In the case of Roland Alberg, whose compensation isn't above the maximum, the TAM must have been used to buy down his transfer fee.

The base salaries and total compensation columns are directly from the MLSPU. The trouble with these numbers is that we know they don't exactly equate to the salary cap hit. I've made a possibly bad assumption that the hit is approximately 75% of the way from the base salary to the total compensation number. Embedded in this number is likely payments to third parties involved in the agreement and are somehow excluded from the salary cap. We don't know what this number is thanks to the grand design. The good news is the differences are relatively small and we can still get a sense of the big picture.

The next column is the pre-allocation money cap hit. For this number I've assumed that Maurice Edu simply counts the maximum. In this case the Union have spent $4.5M, about $830K above the salary cap. This does not include whatever transfer fee counts against the cap for Alberg this year. We know they must have used TAM or GAM to pay this gap, so let's look at that how that could work. And this is really where it gets sticky.

The allocation of allocation money (warning: this may be painful to read and full of speculation - feel free to skip to the bottom line below)

First let's deal with General Allocation Money (GAM). MLS roster rules share that each MLS team gets $150K per year. There is additional money granted for teams that miss the playoffs. I am assuming this is not much but could be wrong. The Union traded some of this GAM for Chris Pontius but also received some GAM in return for Cristian Maidana and Andrew Wenger. They also receive an undisclosed amount of GAM for not using the third DP slot. Thanks to a fan's whiteboard photo taken of the inside of the Union training facility we caught a glimpse of a GAM number, which was $141,169. What's not clear is if that is the number net of all of the above or if that is what remains after allocating some of it to players like CJ Sapong or Brian Carroll, who would be eligible to be GAMed. I just made up a verb.

Then there is Targeted Allocation Money (TAM). The Union were given $500K of TAM last year to spend over the next five years or all at once. This year they were given another $1.6M, only $800K of which could be spent this year or saved until next year when the other $800k will be released. TAM was also included in the Pontius and Maidana/Wenger trades. To make things simple let's assume those numbers canceled out. So the Union have something on the order of $2.1M of TAM to spend. However, they spent some of the $500K gift on Tranquillo Barnetta last season. His half year prorated salary was $326K last year which is above the DP summer transfer level, so the Union would have had to use at least $100K of their TAM to get him below the threshold. But if they needed more cap space then they might have used more of the TAM, perhaps the whole salary.

From the whiteboard we also know that the Union listed their TAM at $952. Is that $952 actual dollars like the amount that could buy a TV or is that $952K? Either way this number agrees with the fact that most of the available TAM is gone. Because if it's just $952 then the money is basically gone. If it's $952K (which wasn't what was on the board) then that means it is an unallocated number and we know that most of that will go away to get below this year's cap.

In either scenario the TAM remaining for this season can't be much.

The bottom line

The whole point of this is to get a sense of what the Union will be capable of doing during the summer transfer window or throughout the rest of the season. As you can see from the right two columns the Union have used about $830k of GAM and TAM just to get to the salary cap. They have more GAM and TAM to play with but not much cap space to use. Here are the three types of players the Union could still sign and how easy it would be:

1. Below max threshold player - The Union could use GAM, release players or buy down existing TAM players to create space for a player making below the max. They could probably add two such players if they wanted.

2. TAM player - TAM players must be between the max threshold and $1M in price. It's very hard to see how the Union would have enough TAM dollars to buy down a player (and if the number is $952 then they definitely do not) AND create the salary cap space. They just don't appear to have enough TAM to get that done without releasing a few players from the roster to make room. I think this is very unlikely.

3. Designated Player - This type of acquisition seems more likely than a TAM player. Using a combination of GAM and TAM on existing TAM players and perhaps releasing a player the Union could absorb a max salary player. They are also using just one DP slot and wouldn't sacrifice future GAM if they added such a player.

There you have it. MLS Capology is murky at best, just the way MLS wants it. The bottom line is the Union are at or below the cap by using a good portion of their TAM and likely GAM but still have some room to maneuver should opportunity strike this summer.

What do you think the Union should do this summer? Answer the poll below.