What’s Wrong with MLS, If Anything? (Part I, Understanding Roster Rules)

When news of Michael Bradley’s return to MLS at the age of 26 first broke on Twitter, blogs, and real-time news sources, immediate reactions varied from disbelief and skepticism to accusations of unfairness to claims of another victory for the growth of MLS.  As the dust settled on the discussion of the Bradley transfer, rumors began circulating that MLS attempted to block the transfer of U.S. international Maurice Edu to the Philadelphia Union, a rumor that Union CEO Nick Sakiewicz immediately refuted. The MLS-as-the-ultimate-decision-maker narrative, however, is not an uncommon story in the headlines.jermain-defoe-michael-bradley

Indeed, if you are interested in starting the Twitter equivalent of fisticuffs, begin a conversation about transfers and then allow the magic words “single entity” to be worked into the conversation.  I unwittingly (unwillingly?) did so just last week.

Discussion about the issues is healthy, but only when premised on facts.  Almost invariably, the conversations are based on conjecture and misinformation.  These often-heated discussions tend to veer away from constructive into the zone of conspiracy theory, with accusations of MLS greed and suggestions that a lack of transparency in MLS rules and regulations are designed to support some larger conspiracy by MLS to suppress competition and put money in the pockets of MLS executives and club owner-operators.

It’s not that the conversations shouldn’t be initiated or that there isn’t room for improvement.  Rather, the problems with these conversations arise when facts are sacrificed for ad hominem claims, and unfounded conspiracies are favored over reason.

Over the next few weeks, I will endeavor to provide the facts necessary to have meaningful, productive discussions about MLS and feasible changes to league.  If the system is flawed and it can be improved, at the very least the dialogue can be premised on reality.

This week, in Part I, I will attempt to provide a guide to MLS roster and transfer regulations.  Although a summary of this information is provided on MLS’s website, the objective here will be to distill the information into easily digestible and comprehensible rules, while incorporating additional information that we know to be true.  This summary will be accomplished over the course of a few days.  Next week in Part II, I will confront the term “single entity,” and provide historical context, establish factual underpinnings of the term, and describe the real consequences of MLS’s structure.  Finally, in Part III, I will try to pin down MLS’s core business objectives and identify the objectives that third parties have ascribed to MLS.  The goal, ultimately, is to provide a baseline for determining what is really wrong with the system, all the while assuming that there is something wrong with the system.  Spoiler alert: the current system may be the most effective system in which to ensure achievement of MLS’s, the U.S. Soccer Federation’s, and U.S. soccer fans’ individual and collective objectives.

Part I: The Guide to MLS Roster and Transfer Regulations

A.  INTRODUCTION TO MLS RULES

Let’s start with the basics.  MLS has posted on its website the “Roster Rules and Regulations,” also referred to as the “2013 Player Rules and Regulations.”  For the sake of simplicity, I refer to them here as the “MLS Rules.”  One could argue that the MLS Rules, as posted, provide sufficient information to form the basis for later reasoned discussions.  I disagree for two reasons.

First, the MLS Rules posted to mlssoccer.com are a summary of the roster rules and transfer regulations, provided by MLS for public consumption.  The comprehensive MLS Rules are tucked away in MLS’s office and are not publicly available.  In order to understand what’s missing from the public knowledge base, it is important to know what is already there.

Second, the MLS Rules, as drafted, are a mess.  As the league has grown over the last decade, new rules have been introduced.  New rules like the Designated Player and Homegrown Player rules have been layered over the top of existing rules and regulations.  Attempts to synergize the rules have either been fruitless or nonexistent.  The practical consequence is confusion about how all of the parts work together and, ultimately, suspicion about the application of the rules.  Although what follows will not dispel all suspicion about what goes on behind closed doors—there is an uncomfortable amount of subjectivity that characterizes many MLS roster and transfer decisions—the outline should tighten up the understanding of the MLS Rules so that commenters can (1) identify those areas where transparency truly remains lacking; and (2) propose meaningful, actionable solutions to real problems.

B. THE MLS ROSTER

Although not the most alluring topic, understanding the structure of an MLS Roster is fundamental.  Most discussions about transfers and player acquisitions are derailed before they even begin because commenters do not understand roster rules beyond the facts that there is a salary cap, Designated Player salaries do not count against the salary cap more than a certain salary amount, and Generation Adidas player salaries do not count against the salary cap.

To begin, an MLS team roster may have up to 30 players.  At any given time—regular season or playoffs—the team may select any one of those 30 players to be in the 18-man match day squad.  The 30 rostered players are divided into two groups: “Salary Budget Players” and “Off-Budget Players.”

1.   Salary Budget Players

Salary Budget Players occupy slots 1-20 on a 30-man MLS roster. Salary Budget Players’ salaries count against the salary budget (also referred to as a “salary cap”), which in 2013 was $2,950,000.  Of the 20 Salary Budget Player slots, teams must only fill slots 1-18. Slots 19 and 20 need not be filled.  If a team fails to fill slots 1-18, any unfilled roster slot is imputed a minimum salary budget charge.

The maximum salary budget charge for any player rostered in slots 1-20 is $368,750 (the “Maximum Budget Charge”).  This threshold number is likely familiar to MLS fans because it is the salary number inextricably tied to the Designated Player rule.  MLS teams that wish to sign and roster Salary Budget Players to salaries in excess of $368,750 can do so by signing the player to a Designated Player contract.

Designated Players

Commonly referred to as the “Beckham Rule” when it was promulgated, the Designated Player rule was first utilized by the L.A. Galaxy to sign David Beckham in 2007.  Under the Designated Player rule, teams can acquire up to 3 players whose salaries exceed the Maximum Budget Charge, regardless of whether those players are new to MLS (like Beckham) or teams are attempting to retain current MLS players (as was the case most recently when the Galaxy re-signed Omar Gonzalez to a Designated Player contract).  MLS clubs “bear[] the financial responsibility for the amount of compensation above each [Designated Player’s] budget charge.”  The MLS Rules note, however, that signing Designated Players are “subject to League approval.”

Los Angeles Galaxy's Robbie Keane, left, of Ireland, Landon Donovan and David Beckham smile during an MLS soccer news conference at Home Depot Center in Carson , Calif., Friday, Aug. 19, 2011. (AP Photo/Jae C. Hong)

L.A. Galaxy’s Robbie Keane, Landon Donovan and David Beckham (L-R) during an MLS soccer news conference at Home Depot Center on Aug. 19, 2011.  Photo courtesy of AP Photo/Jae C. Hong

Each team has 2 Designated Player slots, with the option to purchase a third Designated Player slot for $150,000, which is dispersed as Allocation Money (described in more detail later in Part I) to clubs that do not have 3 Designated Players.  Teams do not need to purchase a third Designated Player slot to acquire Designated Players that are 23 years old and younger (“Young Designated Players”).  Teams cannot trade Designated Player slots.

In as much as the Designated Player rule has been hailed as an opportunity for MLS clubs to compete to sign top-level players, the Designated Player rule, at its roots, is merely an exception to MLS roster rules that allows clubs to sign players with salaries that exceed the Maximum Budget Charge. Designated Players account for the following salary budget charges:

Designated Player Salary Budget Charges

Designated Player (“DP”) Designation Salary Budget Charge
DP over the age of 23 (full season) $368,750
DP over the age of 23 (half season) $175,000
DP age 21-23 (young DP) $200,000
DP age 20 or younger (young DP) $150,000
DP age 23 or younger (young DP) (midseason) $150,000

Teams may “buy down” the salary budget charge for Designated Players using Allocation Money, but in no event can a team buy down a Designated Player salary budget charge to an amount less than $150,000.  Nevertheless, Allocation Money becomes a useful tool for clubs that are managing tight salary budgets and signing multiple Designated Players.

2.  Off-Budget Players

Off-Budget Players occupy slots 21-30 on a club’s 30-man roster.  Off-Budget Players’ salaries, intuitively, do not count against a club’s salary budget.  All Off-Budget Players occupying slots 21-24 (and indeed all Salary Budget Players), earn at least $46,500 (for 2013).  All Off-Budget Players occupying slots 25-30 earn at least $35,125.

Generation Adidas players are rostered as Off-Budget Players, which reflects the commonly held knowledge that Generation Adidas player salaries do not count against teams’ salary budgets. As discussed previously on Business of Soccer, teams benefit greatly by drafting (or picking up in weighted lotteries) talented Generation Adidas players.  That is, teams can afford to pay Generation Adidas picks higher salaries to keep the players in MLS, while focusing on those players’  development.

Moreover, teams can roster as Off-Budget Players up to two Homegrown Players with salaries greater than the minimum salary of $35,125.  Teams can, of course, sign as many Homegrown Players as they wish, but teams may only designate up to two of those Homegrown Players with salaries in excess of $35,125 as Off-Budget Players.

3.  Additional MLS Roster Designations

Minimum Salary

The MLS Rules require that any player making $35,125 must be under the age of 25 (i.e., that player cannot turn 25 during 2013).  According to reports on the current Collective Bargaining Agreement, the minimum salary for players 25 years old or older in 2013 is $46,500.*

International Players

International Player Slots

There are an aggregate of 152 international player slots, divided among the 19 MLS clubs.  Each club began with 8 international slots, all of which can be traded to other MLS clubs.  There is no limit on the number of international players slots that a club can have on its roster, but domestic players must fill all remaining slots.

Domestic Player Slots

Whether a player is a domestic player depends in part on the club for whom that player is rostered.  For the 16 United States-based clubs, a domestic player is (1) a U.S. citizen, (2) a permanent resident (green card holder), or (3) the holder of some other special status, including refugee or asylum status.

For the 3 Canada-based clubs (Montreal Impact, Toronto F.C., Vancouver Whitecaps), either Canadian or U.S. domestic players can fill domestic player slots.  The Canada-based clubs, however, must roster at least 3 Canadian domestic players, which include (1) Canadian citizens, (2) permanent residents of Canada, or (3) members of a protected class.

 

With the roster provisions of the MLS Rules set forth here, the next installment of Part I, which will be published on Thursday, will examine the regulations underlying a more contentious topic: MLS player acquisitions and transfers.

 

 *This article was updated on January 22, 2014 to correct an error.  The first publication of the article stated under the heading “Minimum Salary” that the minimum salary for senior roster players was $40,000.  The minimum salary for senior players (25 or older) for 2013 is $46,500, which is discussed in the first paragraph under “Off-Budget Players.”

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