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What is the MLS salary cap & how much are U.S. soccer players paid?

5:04 AM GMT+8 06/12/2019
David Beckham Inter Miami 2018
The payment approach in football in the United States is markedly different to that which occurs in the Premier League

Major League Soccer does things differently when it comes to paying players and there is a particular set of regulations when it comes to the process.

One of the most notable aspects of MLS, which sets it apart from its European counterparts, is the fact that a salary cap is in place.

Players are paid centrally by the league and as such certain rules apply. However, there are some exceptions too, which facilitate the acquisition of the more expensive talents.

Goal takes a look at the MLS salary cap, how much players are paid and exceptions such as the Designated Player rule.

Contents

  1. What is the MLS salary cap?
    1. MLSPA & the Collective Bargaining Agreement
  2. What is the Designated Player rule?
    1. Notable MLS Designated Players
  3. What is Targeted Allocation Money?
  4. How much do U.S. soccer stars earn?

What is the MLS salary cap?

The salary cap in MLS is the budget each team is allowed to devote towards their roster. For 2019 the MLS salary cap was set at $4.24m (£3.2m) per team for a senior roster of up to 20 players.

A team is not obliged to spread their salary budget across 20 players, but must do so for a minimum of 18 players and no more than 20.

If a salary pot of $4.24m was divided equally among a roster of 20 players, each player would receive a salary of $212,000 a year, which works out at roughly $4,000 a week.

Of course, the competitive nature of the sport means that certain players command greater fees for their services.

However, it should be noted that the maximum yearly salary an individual player in the aforementioned senior roster can get is $530,000 (£400k) - just over $10,000 a week.

The minimum salary for a senior MLS player in 2019 was set at $70,250 (£53k), which works out at $1,350 a week.

There are some exceptions to the salary cap - specifically Designated Players and Targeted Allocation Money - which we will tell you about further down this article.

MLS Players' Association & the Collective Bargaining Agreement

MLS's salary cap has slowly risen over the years. Negotiations take place between league officials and the MLS players' union (MLSPA) to agree payment figures, as well as issues such as travel and compensation .

The MLSPA negotiate a collective bargaining agreement every five years which aims to secure a fair deal for players regarding pay, workers' rights and benefits.

As well as seeking an increased salary budget, one of the big issues ahead of the 2020 negotiations was charter flights and ensuring players do not have to travel on commercial airlines to games.

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What is the Designated Player rule?

The Designated Player rule is an exceptional regulation which allows MLS teams to sign players who fall outside the remit of the league's salary cap protocol.

In effect, the Designated Player rule allows MLS clubs to dip into the international transfer market in order to attract star players to the league through inducements such as lucrative contracts and transfer fees.

For example, while the maximum single salary for a player in a club's salary budget is capped at $530,000 a year, Zlatan Ibrahimovic's base salary as a designated player at LA Galaxy came in at $7.2 million.

Introduced in 2007, the Designated Player rule is sometimes referred to as 'the Beckham rule' as it was instituted specifically to deal with global superstar players such as the former England international.

Notable MLS Designated Players

David Beckham's arrival at LA Galaxy as a Designated Player (DP) in 2007 paved the way for a long line of global stars in MLS.

Among those to become DPs in MLS are Thierry Henry, Kaka, Robbie Keane, David Villa, Andrea Pirlo, Steven Gerrard and Wayne Rooney.

You can see a list of selected designated players from MLS history below.

Year signed Player Signed for
2007 David Beckham LA Galaxy
2007 Denilson FC Dallas
2010 Landon Donovan LA Galaxy
2010 Thierry Henry New York Red Bulls
2011 Robbie Keane LA Galaxy
2011 Freddy Adu Philadelphia Union
2014 Kaka Orlando City SC
2014 David Villa New York City FC
2014 Michael Bradley Toronto FC
2015 Frank Lampard New York City FC
2015 Andrea Pirlo New York City FC
2015 Steven Gerrard LA Galaxy
2015 Didier Drogba Montreal Impact
2015 Sebastian Giovinco Toronto FC
2017 Bastian Schweinsteiger Chicago Fire
2018 Wayne Rooney D.C. United
2018 Carlos Vela Los Angeles FC
2019 Nani Orlando City SC
2019 Zlatan Ibrahimovic LA Galaxy

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What is Targeted Allocation Money?

Targeted Allocation Money (TAM) a sum of money given to teams by MLS in order to recruit or retain players who will have an immediate impact on the pitch. In 2019, TAM was $1.2m, plus a "discretionary" $2.8m.

So what is it for? There are a number of ways in which TAM can be used:

  • to convert a Designated Player to a non-Designated Player by 'buying down' their salary. Once a DP slot has been freed up using TAM, it must be filled by a player of equal or greater value.
  • during trades as a bargaining chip.

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How much do U.S. soccer stars earn?

Depending on their status and where they ply their trade, U.S. national team stars earn different sums through their playing contracts.

In MLS, for example, Michael Bradley is the highest-earning USMNT star, thanks to his $6m (£4.5m) a year remuneration. Jozy Altidore follows Bradley on just under $5m (£3.8m) a year.

However, Christian Pulisic earns quite a bit more than his international team-mates as he is on a reported £145,000 a week at Chelsea - an annual salary of £7.5m ($10m).

Gyasi Zardes' annual salary in 2019 was $1.4m (£1m), but Brad Guzan, earns significantly less, with a base annual salary of $680,000 (£500k).

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