By Canadian Press

Major League Soccer lifts the lid on how much general allocation money clubs have

Dec 19, 2024 | 8:20 AM

Think of it as a moment of transparency in a league rife with confusing, ever-changing salary and roster rules.

In a first, Major League Soccer has revealed the amount of general allocation money (GAM) each of its 30 clubs has to use in 2025.

General allocation money is essentially an artificial mechanism to allow MLS teams more bang for their buck in building their roster. It is one of several ways clubs can extend their spending power under what the league bills as its “salary cap budget.”

General allocation money can be used in trades to acquire players, international roster slots and draft picks. The league normally only provides GAM amounts when they figure in a trade, previously declining to detail GAM amounts per club “to protect the interests of MLS and its clubs during discussions with prospective players or clubs in other leagues.”

In 2024, MLS clubs had a salary cap budget of $5.47 million (all figures in U.S. dollars) to pay their senior roster (which covers up to 18 or 20 players on the 30-man total roster). The league is providing $2.93 million in general allocation money to each team in 2025 with expansion San Diego FC receiving an additional $2.765 million.

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Even with that expansion boost, San Diego’s current GAM total of $5,095,000 ranks behind Atlanta United ($6,503,478), New England ($5,585,931) and St Louis City FC ($5,306,579). Six teams — FC Cincinnati, FC Dallas, Minnesota United, the Philadelphia Union, Real Salt Lake and the Seattle Sounders — have 2025 GAM accounts between $4 million and $5 million.

The Houston Dynamo have the lowest number at $2,063,538.

The amounts listed by the league are what each club has going into the season before applying it to any of its players.

The Vancouver Whitecaps lead their Canadian rivals with $3,658,458 in 2025 general allocation money. Toronto FC’s current 2025 GAM account stands at $3,318,648 while CF Montreal’s number is $2,948,106.

In August, Toronto acquired up to $1.3 million in general allocation money from Montreal in exchange for winger Jahkeele Marshall-Rutty, with Montreal giving up $450,000 in 2024 GAM, $400,000 in 2025 GAM and up to an additional $450,000 in GAM if certain performance-based metrics were met.

And Philadelphia picked up to $600,000 in general allocation money, spread over 2025, ’26 and ’27, earlier this month in a deal that sent eight of its MLS SuperDraft picks over the next three years to the Colorado Rapids.

General allocation money can be used to “buy down” a player’s salary cap hit. For example, a club could use $300,000 in GAM to reduce a player’s salary hit from $450,000 to $150,000.

It can also be used to reduce a loan or transfer fee. So a team could pay $500,000 to acquire a player via transfer and apply $500,000 in GAM to the player’s salary budget charge.

Clubs can also use up to $200,000 in GAM to sign new homegrown players to their first MLS contract, allowing them to be placed on the club’s supplemental roster (which covers players 20 through 30 on the roster).

League rules allow teams to choose between two roster models, each of which comes with its own pluses — one of which is more GAM.

One model allows a team to have up to three designated players and up to three U-22 Initiative players. The other model permits up to two designated players and up to four U22 Initiative players — and comes with up to an additional $2 million in general allocation money.

Both DPs and U22 Initiative players come with a salary cap break.

In 2024, a designated player over the age of 24 carried the maximum salary budget charge of $683,750 no matter their actual pay (Lionel Messi’s salary with Inter Miami was $20.5 million in 2024 while Toronto paid Lorenzo Insigne $15.4 million). Clubs can use GAM to “buy down” a DP’s salary budget charge.

Players occupying a U22 Initiative lot carry the same salary budget charge as that of a Young Designated Player ($150,000 for players aged 20 and younger and $200,000 for players 21 to 25).

There are more rules regarding the rules, with restrictions and exceptions. The league’s 2024 roster rules are 8,580 words long.

General allocation money is not to be confused with targeted allocation money (TAM).

TAM essentially gives teams a salary cap break in acquiring or signing players making more than the maximum salary budget charge. In 2024, a player had to earn more than $683,750 and less than $1,683,750 to qualify for targeted allocation money.

Each team will receive $2,225,000 in targeted allocation money in 2025.

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This report by The Canadian Press was first published Dec. 19, 2024

Neil Davidson, The Canadian Press