Editorial (May 10, 2018) – That day has finally arrived, MLS salary budget and roster rule nerds. Earlier today, the MLS Players Union released the 2018 MLS player salaries. Let’s take a look at the Colorado Rapids player salaries and where their budget is at.
Analyzing the 2018 Colorado Rapids player salaries
See Colorado’s payroll as released by the MLS Players Union below. I’ve made this Google Spreadsheet open to the public and downloadable. Find there here if you’d like your own copy and want to play around with it. Additionally, find the Rapids roster here and a full list of the MLS roster rules and regulations here.
I won’t bore/confuse you by going through all the roster and budget minutia. MLS can be transparent as mud when it comes to this stuff. I’ll explain everything as best as I know it. See the appendix at the bottom for more details on various things. Feel free to contact me if you think you see any mistakes. Now, to the analysis.
General roster and budget breakdown:
MLS allows teams to have up to 30 players. Roster spots 1-20 are Senior Roster players. They count against the 2018 Salary Budget of $4,035,000 (all money amounts in this article are in USD). They have to make at least the Senior Minimum ($67,500). The max budget charge for each senior player is $504,375. Teams can players more than that by subverting the budget several different ways .
The Rapids have 19 senior players. Assuming all the players making more than the max budget amount are subsidized to the max budget charge, the Rapids are over the salary budget with $5,806,058.08 based on the base salary amounts. That means they’re using extra funds of at least $1,771,058.08 to get under budget. It’s harder to estimate this when looking at guaranteed compensation for several reasons . By guaranteed compensation, that number jumps to $1,918,502.
Roster spots 21-24 are for Supplemental players. These guys don’t count against the cap but have to be making at least the senior minimum. They can be making more based on various Homegrown or Generation Adidas financial mechanisms. This is a really good place to stash Homegrown Players or move league minimum players around to make space elsewhere in the roster structure. The Rapids have all four of these spots filled.
Spots 25-30 are for Reserve Roster player. Players 25-28 must make the reserve minimum of $54,500. They can’t be Senior Minumum or Generation Adidas Players. Reserves must also be 24-years-old or younger based on birth year (not birth date). Spots 29 and 30 must be Homegrown Players only. Reserve Homegrown players can still get all the financial benefits of being Homegrown.
Basically, this spot is for young players who just turned professional. The Rapids have all of these spots filled.
So how much wiggle room do the Rapids have?
The Rapids have one open roster spot right now, a Senior Roster spot. For this, I am assuming that the players currently loaned down to various USL teams still take up a roster spot with the Rapids though there is some complexity here ***. The MLS-USL affiliation rules regarding player transactions aren’t very clear.
Across all players, the club has a 2018 guaranteed compensation of $11,001,331.46. Based on the 2017 team salaries and accounting for the new influx of Targeted Allocation Money (TAM), that probably puts them upper-midtable in MLS in terms of spending.
As mentioned above, they have almost $1.8 million in base salary over the senior budget allotment. The Rapids could be reaching compliance by several different means. MLS introduced an extra $1.2 million in TAM for 2018 and teams can spend up to $2.8 million in Discretionary TAM (out of their own pocket) this year. There have been rumors the Rapids were planning to dip into that. More on that later.
MLS teams can also buy down player salaries and transfer fees with General Allocation Money (GAM). There are a few limitations with both GAM and TAM. There have also been reports that teams can only use GAM to subvert player salaries by a certain amount. Last year, it was reportedly around $600,000.
The Rapids do have an open Designated Player spot that they could use to bring a star player in during the summer. They are currently using all seven of their International Roster Slot, so they’d have to move a player, acquire another International Roster Slot (not easy), or someone would have to acquire their green card.
TELL US HOW MUCH GAM AND TAM THE RAPIDS ARE USING!
Full disclosure: Some of this is guesswork. League/club press releases don’t provide the full financial details on player acquisitions. They only started releasing transfer fee information on inter-league deals back in 2015. We rarely get confirmation on transfer fees for foreign players or even a ballpark estimate. Allocation Money can also be used on both the transfer fee and salary for a player, so that’s another unknown variable that complicates things.
We know from last year that TAM was used in acquiring Nana Boateng last year, but TAM wasn’t used on his salary. Everyone making more than him who isn’t a DP could have TAM or GAM involved in their paychecks.
Another clue we have is that the Rapids have started including whether TAM or GAM was used in signing players. They don’t give the amount of TAM or include any details on a transfer fee or even if there was one.
The club has confirmed that TAM was used in getting Jack Price, Joe Mason, and Yannick Boli. Mason is here on a one-year loan, so there probably wasn’t a fee paid to Wolverhampton Wanderers for that. So TAM is probably used on just Mason’s salary: $907,500 – $504,375 = $403,125 TAM.
Boli is the second highest paid player on this team but he was coming from the Chinese second division. There’s volatility when it comes to foreign players in China due to the federation’s change in rules for international players, so there’s a possibility Boli’s move was a free transfer or a minor fee . His situation could be similar to Mason: $682,500 – $504,375 + $100,000 = $178,125 TAM.
Jack Price is a bit of a mystery to me. Based on the hype, I would have thought he was making more than $400,000. My guess would have also involved a decent transfer fee. Looking at his salary and his comments on not playing much the last two years for Wolves, there’s a chance he came on a nominal transfer fee or on a free. Let’s thrown in some cash to be conservative: $300,000 TAM in a transfer fee.
Fourth highest paid is Stefan Aigner. We already know he came to MLS last summer as a free agent. So his only TAM use is in his compensation: $845,885 – $504,375 = $341,510.
Lastly are Tommy Smith and Danny Wilson. I’ve left these two out for a few reasons. Neither of their club press releases (here and here) mentions TAM or GAM. Based on some very unreliable sources, their market values in January were in the several $100,000’s. Neither were the most valued player at their club.
That said, both are over half a million. Both are making more than Jack Price who was signed with TAM. Both are in the range that GAM could have been used to acquire them. For the sake of being conservative, let’s assume GAM was used on nominal transfer fees and their salaries.
Smith: $640,000 – $504,375 + $100,000 = $235,625 GAM.
Wilson: $540,000 – $504,375 + $100,000 = $140,000 GAM.
So, based on the info we have, some inferences, and guesswork, the Rapids could have spent $1,322,760 in TAM and $375,625 in GAM. Now, that’s just to get the individual player guaranteed compensations under the maximum budget amount. These amounts get the Rapids budget cap to $5,806,058. That’s $1,918,502 over the max budget amount.
Let’s assume they use the full rumored $600,00 in GAM to subsidize the cap on say, Nana Boateng, Johan Blomberg, and Sam Nicholson. That’s $424,375 in GAM ($600,000 – the $175,325 spent on Wilson’s and Smith’s salaries).
That leaves $1,494,127 in budget space. Let’s assume the Rapids dip into their discretionary TAM to get the rest. That’s $2,816,887 in total TAM spent.
From previous transactions, we know the Rapids sent $50,000 in GAM in the Sam Nicholson trade. They got $100,000 in TAM when they sent Jared Watts to Houston Dynamo. Back in March, they got $277,500 in TAM for $185,000 in GAM from Vancouver Whitecaps FC. In February, they sent $100,000 in GAM to Sporting KC for a 2018 International Roster Slot. Back in December, they got Deklan Wynne from Vancouver for $100,000 in TAM.
All of those moves net the Rapids $277,500 in TAM and have them spending an extra $335,000 in GAM. Teams cannot trade discretionary TAM. With that, here’s the total amount of TAM and GAM I’ve got the Rapids spending in 2018 as of now:
TAM: $2,816,887 spent – $277,500 acquired = $2,539,387 TAM spent
GAM: $600,000 spent on player salaries + $200,000 spent on transfer fees + $335,000 spent in inter-league deals = $1,135,000 in GAM spent
That’s the full $1.2 million given by the league and $1.34 million of the $2.8 million in discretionary TAM out of the club purse strings. That’s probably way more than the Rapids were spending several years ago.
Who’s overpaid and who’s underpaid?
Unlike past iterations of this article, I don’t have a lot bad to say here. We’re still so early into this season and Head Coach Anthony Hudson and the squad are figuring things out that answering this question is probably premature.
If there is any dead weight on this roster right now, it’s Stefan Aigner. He’s the fourth highest paid player on this team and has played just 11 minutes this season. For the full breakdown of #Aignergate, see this week’s episode of Holding The High Line.
Other than him, everyone is either bringing value proportional to their cost or is still an unknown. Axel Sjoberg making almost $200,000 as essentially a third choice center back isn’t great but plenty of teams have more expensive contracts that are dead weight. I’d normally say $170,000 for a backup keeper is too much, but Zac MacMath is one of the best backups in the league.
As of now, there are a few players I would classify as underpaid. As mentioned above, Price’s wage is less than expected. That said, it’s not hard to find a quality and affordable American No. 6. Price is certainly one of the better players at his position in the league though.
For what they bring, Enzo Martinez and Edgar Castillo are great value MLS contracts. Castillo was one of the better fullbacks in Liga MX when he came to Colorado. We already knew there wasn’t any TAM or GAM used on his contract, but still. Martinez is on a Senior Minimum contract which is great value for what he’s provided so far.
* Previous Rapids press releases have mentioned TAM used in signing players. The club announcements on signing Wilson and Smith did not mention TAM. Their salaries are higher than I expected given this. There’s something more here. #MLSTransparency
** All of these players have been on loan and recalled at some point during the season. The MLS-USL affiliation hasn’t brought any clarity to whether the USL team is paying players on loan and how much relative to their MLS salaries. Who knows how much of their compensation (reported or otherwise) is coming from the Rapids or their USL club.
*** Mike da Fonte was loaned to Phoenix Rising FC before the MLS season started. He’s in the last year of his MLS deal with the Rapids. The Rapids still have him on the roster on their site but MLSSoccer.com’s roster excludes him. For the sake of completeness, I’ve included him in this article. There’s a very real possibility the Rapids have an extra roster spot in his place. Regardless, I doubt we see him in Commerce City in 2018 again. The club will likely let him walk at the end of the year.
 So teams can sign players and have them make more than the max senior amount by several different mechanisms. The David Beckham Rule ushered in the MLS 2.0 Era, the era if Designated Players (DPs). Basically, teams get three DP roster spots. They can sign players and make them DPs, allowing the team to play them whatever they want out of pocket. TAM was invented back in 2015 (we could call it the Giovani dos Santos Rule). Basically, Commissioner Don Garber gives every team a certain amount of league money as TAM every year. You can sign players to the first team with it (transfer fee and/or salary) or trade it for anything within the league. TAM players can also be compensated over the max budget amount. There’s a bunch of rules that limit how TAM is used. Then there’s GAM. Basically, money teams get from the league in various amounts based on certain criteria. Teams can also draw GAM out of pocket from ownership. They can use it on almost anything. Then there’s Generation Adidas and Homegrown Players. They count as veteran minimum players most of the time but you can pay them more than that through these rules the league came up with to incentivize youth development.
 Guaranteed compensation in MLS is weird. There’s a bunch of different things players can do to get more money beyond their base salary. A lot of them are on the field performance based. Players also can get bonuses for player/community appearances on behalf of the club, activities through club sponsors, etc. There’s not a lot publically known about these rules or specifics within individual player contracts. It’s also unclear how much of this extra money counts against the salary budget and how much is allowed.
 So the Chinese Super League has been spending ridiculous money on foreign players in an effort to grow the league. They’ve also had some drastic and complicated changes to their rules for how many foreign players each team can have, what they make, etc. Initially, big stars in Europe didn’t want to go to China. So some mid-tier and lower level foreigners were going (such as Obafemi Martins and Ryan Johnson, who both played in MLS). Then the big money came and so did players like Oscar. Now there’s been an exodus of a lot of these foreign players when clubs get a chance to land someone huge. As such, Chinese clubs sometimes have to offload international players quickly out of necessity. Desperation leads to interested clubs having lots of bargaining control.