Putting A Value On The Designated Player

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By Dario Camacho – MIAMI, FL (Feb 24, 2012) US Soccer Players — For most clubs, the designated player rule doesn't work.  Here's how to fix it. 

At the 2011 MLS Cup, a Designated Player wish was fulfilled.  A team that spent well past the salary cap was rewarded with the MLS Cup.  A monumental occasion to say the least, tangible proof that spending can mean winning rather than seeing a small budget club take advantage of the playoff system. 

Triumph for the designated player teams,  yet it's Major League Soccer's own history working against the designated player revolution.  There's still the strict salary cap after all, and really spending on a designated player – including transfer fees – is reserved for only a few clubs.  The teams unwilling to spend face a tough task in matching what the big clubs can do with their money.

The Problem

What we have here is a distinct disadvantage disguised under a patina of parity.  Every team has the opportunity to obtain up to three Designated Players, but that's quickly tempered by the fact that not every team can sign three of them, much less one. 

Take the San Jose Earthquakes for example.  They returned to the League the year after the Designated Player rule was put in place.  Yet, they’ve only managed to sign one designated player in their short tenure, Giovanni.  Half a season of his service, and he was gone from the team by the end of the 2010 season.

It’s the best they can do, and they're far from the only team in that category.  Frugality is the constant under which they must operate.  Their comfort zone lies within the signings of budget players – investing through the strength of the squad instead of through the individual.  They have a stadium to think about, and other uses for their funds.  It's their own club-specific version of a hard cap.

Money, in short supply, is not a luxury that a team like San Jose has.  Those that do and spend accordingly put themselves in a different category.  Even when small budget teams were winning MLS Cups at the expense of high payroll clubs, it remained a real and growing disadvantage.   In the end, it tips the balance in favor of clubs willing to spend money, something the single-entity system was invented to avoid.  What it creates is an unbalanced disadvantage masked as opportunity.

The Solution

There is a quick and immediate solution.  Well, there are many solutions but this one keeps what's left of single-entity in place.  It's based on the idea that if the designated player rule was designed to increase the level of play, clubs not taking their DP exemptions are being counterproductive. 

Instead, MLS should value designated player slots accordingly – say $250k each – and allow teams to return them to the League for that amount added to their salary cap.  In total, three slots would constitute $750,000 extra toward the salary cap.  If a team ever wants to sign a DP, then they would have to reduce that cap space by $250k per slot.

The implications are obvious, allowing an advantage for teams that can't or won't take the designated player option.  It also addresses the competitive issue of Major League Soccer's version of parity.

Each offseason, a team must go through the rigors of the salary cap dance that restricts certain teams from improving year after year.  Parity always keeps teams from amassing talent, just because teams can’t fit everyone that needs a raise under such a cap.  This diminishes a teams quality.  One way or another, either depth or quality will suffer.

With the change, maneuvering a team on the rise that would otherwise hit a wall because of the salary cap becomes easier.  They can make a designated player decision for the good of their club, rather than being forced to hang onto slots they have no intention of using. 

Remember, the League's last tweak to the designated player exemption took away the ability of teams to trade DP slots with each other.  Turning those slots back into the League maintains that rule, avoids the richer teams stockpiling DP exemptions, and allows teams that won't spend on DP's at least some advantage when competing against the teams that will.

It's a quality control issue.  That's the ultimate goal after all,  improving the product within the limits of MLS.   With the way parity, the salary cap and the Designated Player exemption currently work, those limits are too strict.  If the concern is teams simply trading in all their designated player slots as a matter of course, they still have to compete with teams like the Galaxy.  Giving small market teams the tools to compete on something closer to an equal footing helps this League.

Dario Camacho made the move from regular commentator as Pesmerga7 to columnist.  He writes weekly for US Soccer Players. Follow him on twitter at DarCam7.

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5 Responses to Putting A Value On The Designated Player

  1. SoccerROM says:

    I like the general idea, but as with many things MLS, it probably works best to move gradually in this direction — maybe start by allowing teams to turn back just one of their three DP slots in exchange for salary cap space. This way, you aren’t effectively increasingly the salary cap by a huge percentage overnight, which should bring more comfort with the idea to the owners.

  2. Arskicker says:

    It would certainly be a balance that’s currently lacking. I’m concerned that we’re seeing the push toward whatever is next and damn the consequences. We’ll have half good squads with others making up the numbers. At least this would give the clubs that don’t see the point in spending a benefit.

  3. anon says:

    I think it was the state of the league where Garber said they had people who only worked on NYC expansion. This is an expansion focused league, and to me they only care about that, getting teams to spend on marquee players, and transferring players for fees. It would be nice if they’d adopt something like what you’re describing, but I doubt it will happen.

  4. Will-yo says:

    I like the idea. Perhaps, a team willing to sign DP’s, signs each new DP, they must pay a yearly “tax” back to the league to do so. This “DP tax” could then be passed onto the teams that do not sign a DP to help soften the blow of the extra 250-750K that the league would be forking over to teams choosing to forgo a DP.

    One issue I see is if the team that initially does not sign any DP’s then decides to sign one, there is a double hit to their cap space. Not only would the lose the extra cap money, but then the newly signed DP would count against this new -lowered- cap. This would hit that team cap twice and cause real turmoil in the squad.

  5. DarCam7 says:

    I should have clarified this a bit, but that option of “trading” a DP slot for extra cap space would be supplied by the team, and not the league. Meaning those $250,000 would be money coming from the teams pockets towards the overall salary cap.

    As for the tax, the league has something akin to this, as the third DP slot used by any team is subject to a luxury tax. I believe it’s $150,000, but don’t quote me on that.