Major League Soccer announced today that, effective immediately, each team will be allowed to sign a second Designated Player (DP) to its roster, and will also have the option to purchase a third DP slot.
The changes are designed to enable an influx of big-name international talent to MLS (potentially players like Barcelona’s Thierry Henry or Real Madrid’s Raul Gonzalez) while still permitting clubs to stay within the league cap for total salary expenditures, set at $2.55 million by the recently signed MLS collective bargaining agreement. The Designated Player Rule was first implemented in 2007 to allow MLS to sign David Beckham to a $6.5 million contract.
Under the new system, each DP will count as only $335,000 under his team’s salary cap — approximately 13% of the total budget for all player salaries for any given team. While the League would continue to sign the designated players in keeping with its “single entity” system, the part of the DP’s salary that falls outside of the team’s salary budget will be the financial responsibility of the club for which the DP will play. A team may reduce the charge of a DP against its salary cap with allocation funds, which MLS provides to teams based on their league position the prior season, transfers of players abroad, expansion or other circumstances.
Should a team desire to add a third DP slot, it may do so by paying $250,000 that will be divided evenly as allocation funds among the other MLS teams that do not have three designated players on their roster.
The initial window for MLS teams to acquire players under contract in other leagues concludes on April 15, 2010. A secondary registration period will occur immediately following the World Cup, from July 15 through August 14, 2010.