Designated Player Rule

Designated Player Rule

The Designated Player Rule, nicknamed the Beckham Rule, was adopted as part of the salary cap regulations of Major League Soccer for the 2007 season. The rule allows each MLS franchise to sign players that would be considered outside of the team's salary cap, allowing MLS teams to compete for star players in the international soccer market.

Contents

History

The team salary cap was estimated to be around US$1.9 million in 2006[1], was $2.1 million in 2007, and was raised to $2.3 million for the 2008 season.[2][3] As part of the 2010 Collective Bargaining Agreement between MLS and the MLS Players' Union, the 2010 salary cap will be $2.55 million with an automatic five percent increase each year until the expiration of the agreement at the end of the 2014 season.

Under the 2007 rule:

  • The rule expires at the end of the 2009 season, and must be renewed then or allowed to lapse.
  • For each Designated Player, $400,000[3][4] of his salary is charged to the salary cap and paid by the league, with any remaining salary being paid by the team's owner. This value was increased for the 2009 season to $415,000.
  • Prior to the 2007 season, there were three players whose salary exceeded $400,000. These players were Landon Donovan, Carlos Ruiz and Eddie Johnson. According to the rule, these players were grandfathered in for the 2007 season, and the exemption was extended after the 2007 season, with the league planning to review the issue at a future date. It was possible that the league would be required to renegotiate these players' contracts or consider them Designated Players. However, prior to the start of the 2008 season, Johnson moved to Fulham of the Premier League[5], while following Dwayne De Rosario's signing by Toronto FC in January 2009, Ruiz was released by the club and left MLS to play for Olimpia Asunción. This left Donovan as the lone player whose 2009 salary remained grandfathered under the exemption provision. However, there were several more players whose guaranteed salary exceeded the Designated Player amount, but whose salary cap expense was actually lower than their true salary due to the allocation rule. These players include Shalrie Joseph ($450,000), Christian Gomez ($430,000), Dwayne De Rosario ($425,750), and Taylor Twellman ($420,000).
  • Each team initially had one Designated Player spot, but could trade their Designated Spot to another team; teams were allowed a maximum of two Designated Players.
  • Only $325,000 of a team's second Designated Player counted against the salary cap, which was increased to $335,000 in 2009.[3]

The 2010 changes:[6]

  • The rule has no expiration date.
  • For each Designated Player, $335,000 of his salary is charged to the salary cap and paid by the league, with any remaining salary being paid by the team's owner. This amount is halved for Designated Players signed in the middle of the season. The salary cap value of Designated Players can also be reduced using allocation money. Finally, teams whose Designated Players transfer abroad in the middle of a season can recoup part of the Designated Players' salary cap value.
  • Landon Donovan is no longer grandfathered into the rule and must be considered a Designated Player.
  • Each team is allowed two Designated Player spots, and they can no longer trade their Designated Player spots. The New York Red Bulls will receive $70,000 in allocation money in return for the nullification of their 2007 trade with Chivas USA for an additional Designated Player spot. This means that both New York and Chivas USA will have two Designated Player spots for the 2010 season.
  • Teams can pay a $250,000 "luxury tax" for the right to sign a third Designated Player. This $250,000 would be distributed equally to all MLS teams that have not signed a third Designated Player in the form of allocation money.

Starting with the 2012 season, the rule will be changed with respect to younger players. MLS announced the changes in August 2011 after clubs expressed concern about signing young international players with no guarantees that they would develop into stars. Under the new rules, no new slots will be added, but international players age 23 and under signed under the Designated Player Rule will be subject to a reduced salary cap number:[7]

  • Ages 21 to 23: $200,000.
  • 20 or younger: $150,000.

Background

The rule is informally named after football star David Beckham, in anticipation of MLS teams signing lucrative deals with internationally recognized players of Beckham's caliber.[8] As it turned out, Beckham was indeed the first player to be signed under this rule, signing a lucrative contract with the Los Angeles Galaxy for up to a $250 million increase in Beckham's total compensation over five years, with a base salary of $6.5 million per year in direct salary. The rest of Beckham's increased earnings would come from Beckham regaining the entirety of his image rights, which Real Madrid had owned fifty percent of, effectively doubling his existing endorsement income, as well as new endorsement deals, a share of jersey sales, bonuses, etc.[9]

Current Designated Players

Year Signed Player Current club 2011 Guaranteed Compensation [10]
2007 England Beckham, DavidDavid Beckham Los Angeles Galaxy $6,500,000
2007 Colombia Ángel, Juan PabloJuan Pablo Ángel Chivas USA $1,250,000
2009 Canada de Guzman, JulianJulian de Guzman Toronto FC $1,910,746
2010 United States Donovan, LandonLandon Donovan Los Angeles Galaxy $2,300,000
2010 Montenegro Bošković, BrankoBranko Bošković D.C. United $525,367
2010 France Henry, ThierryThierry Henry New York Red Bulls $5,600,000
2010 Uruguay Fernández, ÁlvaroÁlvaro Fernández Seattle Sounders FC $366,667
2010 Mexico Marquez, RafaelRafael Márquez New York Red Bulls $4,600,000
2010 Mexico Bravo, OmarOmar Bravo Sporting Kansas City $170,000
2010 Costa Rica Saborío, ÁlvaroÁlvaro Saborío Real Salt Lake $305,625
2010 Colombia Montero, FredyFredy Montero Seattle Sounders FC $636,000
2011 France Hassli, EricEric Hassli Vancouver Whitecaps FC $900,000
2011 Colombia Ferreira, DavidDavid Ferreira FC Dallas $705,000
2011 Peru Mendoza, AndrésAndrés Mendoza Columbus Crew $595,000
2011 Colombia Castillo, FabiánFabián Castillo FC Dallas $42,000
2011 Colombia Chará, DiegoDiego Chará Portland Timbers $143,758
2011 Germany Frings, TorstenTorsten Frings Toronto FC $1,113,662
2011 Netherlands Koevermans, DannyDanny Koevermans Toronto FC $1,413,319
2011 The Gambia Jarju, MustaphaMustapha Jarju Vancouver Whitecaps FC $426,883
2011 Germany Rost, FrankFrank Rost New York Red Bulls $545,460
2011 Brazil Jéferson Sporting Kansas City $484,996
2011 Argentina Milton Caraglio New England Revolution $54,000
2011 Republic of Ireland Robbie Keane Los Angeles Galaxy $3,417,243
Notes
  • Chart indicates when players signed their Designated Player contract, not necessarily their first year in MLS.
  • Player salaries include compensation from their MLS contract, not including any bonuses or compensation from contracts with individual teams or their affiliates.

Past Designated Players

Year/s Played Player Club/s Average Salary
2007–2010‡† Brazil Emilio, LucianoLuciano Emilio D.C. United $516,043
2007–2008 United States Reyna, ClaudioClaudio Reyna New York Red Bulls $1,250,008
2007–2009 Mexico Blanco, CuauhtémocCuauhtémoc Blanco Chicago Fire $2,759,086
2007 Brazil Denílson FC Dallas $879,936
2008 Argentina Gallardo, MarceloMarcelo Gallardo D.C. United $1,874,006
2008–2009, 2010† Argentina López, ClaudioClaudio López Kansas City Wizards, Colorado Rapids $373,333
2008–2010‡† Argentina Barros Schelotto, GuillermoGuillermo Barros Schelotto Columbus Crew $463,750
2009–2010, 2010 Sweden Ljungberg, FreddieFreddie Ljungberg Seattle Sounders FC, Chicago Fire $1,314,000
2009–2010 Mexico Landín, Luis ÁngelLuis Ángel Landín Houston Dynamo $120,000
2010 Switzerland Nkufo, BlaiseBlaise Nkufo Seattle Sounders FC $480,000
2010 Spain Mista Toronto FC $987,338
2010 Mexico Castillo, NeryNery Castillo Chicago Fire $1,788,061
2010 Brazil Geovanni San Jose Earthquakes $n/a
Notes
  • ‡ – indicates players who originally signed with MLS at a salary lower than a Designated Player level but later had their salary increased to a Designated Player level.
  • † – indicates players who still continued to play in MLS but had their contracts negotiated below a Designated Player level.
  • Player salaries include compensation from their MLS contract, not including any bonuses or compensation from contracts with individual teams or their affiliates.

Most Designated Players per country

See also

References

  1. ^ Goff, Steven (2006-04-26). "Palencia Has Richest MLS Salary". Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2006/04/26/AR2006042602276.html. Retrieved 2007-12-01. 
  2. ^ Mickle, Tripp (2007-11-26). "Debate highlights MLS salary cap split". Sports Business Journal. http://www.sportsbusinessjournal.com/index.cfm?fuseaction=article.main&articleId=57143&requestTimeout=900. Retrieved 2007-12-01. 
  3. ^ a b c Bell, Jack (2009-03-18). "In M.L.S., Designated Players Do Not Guarantee Great Expectations". New York Times. http://www.nytimes.com/2009/03/18/sports/soccer/18soccer.html?ref=soccer. Retrieved 2009-03-18. 
  4. ^ "Galaxy, Milan, Inter wait on Becks". CNN. 2009-02-24. http://sportsillustrated.cnn.com/2009/writers/soccer_america/02/24/aeg.beckham/. Retrieved 2010-05-01. 
  5. ^ "Fulham complete Johnson signing". BBC Sport. 2008-01-23. Archived from the original on 2008-01-27. http://web.archive.org/web/20080127164821/http://news.bbc.co.uk/sport2/hi/football/teams/f/fulham/7202841.stm. 
  6. ^ Mayers, Joshua (April 1, 2010). "Major League Soccer adds second DP slot, can purchase a third (league release)". The Seattle Times. http://seattletimes.nwsource.com/html/soundersfcblog/2011498898_major_league_soccer_adds_secon.html#continue. Retrieved April 2, 2010. 
  7. ^ Associated Press (August 16, 2011). "MLS alters designated player rule". ESPN.com. http://espn.go.com/sports/soccer/news/_/id/6867113/mls-changes-rule-bring-more-young-international-players. Retrieved August 17, 2011. 
  8. ^ Lansley, Pete (2007-04-13). "Becks could be the next American idol". The Telegraph. http://www.telegraphindia.com/1060413/asp/sports/story_6093255.asp. Retrieved 2007-12-01. 
  9. ^ "Beckham hopes to make US history". BBC. 2007-01-12. http://news.bbc.co.uk/sport2/hi/football/6256125.stm. Retrieved 2007-12-01. 
  10. ^ "2011 MLS Player Salaries". 2011 MLS Player Salaries. Major League Soccer Players Union. http://www.mlsplayers.org/files/May%201,%202011%20Salary%20Information%20-%20By%20Club.pdf. 

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