A Look at the Fire's Salary Cap Situation

Trying to decipher all the rules and hidden intricacies of the MLS salary cap isn't particularly easy from an observer's point of view since we're not privy to information such as allocation dollars available from previous transactions and roster designations.  However, we can ascertain how much each club theoretically has available by simply looking at the MLS Players Union Salary list.

As a result of the new collective bargaining agreement signed this season the salary cap was increased to $2,550,000.00 per team for 2010.  The cap will increase by 5% each year for the next four seasons hereafter.  Where does this leave the Fire?

 

From information gathered in the Players Union release, the Fire's current salary amount against the cap is $2,496,210.00.  This number is reached by simply adding the base salaries of each rostered player.  The Fire's total "guaranteed compensation" for 2010 is $2,890,293.00 although the base salary number is the figure used when determining the total cap dollars used. 

Given that Corben Bone and Sean Johnson are both 2010 Generation Adidas players, their salaries do not count against the cap figure.  This lowers the Fire's "cap" dollars used to $2,366,210.00. 

By releasing Julio Martinez before the July 1 Guaranteed Contract date, the Fire was also able to save half of Martinez' 2010 salary thereby lowering the "cap" number to $2,306,210.00.  By simply subtracting the current "cap" number from the newly increased salary cap figure of $2,550,000.00 one can assume that the organization is currently $243,790.00 below the cap.

Per the new collective bargaining agreement and the league's new designated player rules each team can add two designated players which will count for $335,000.00 of cap space for each player.  If a designated player is signed at mid-season the cap hit is lowered accordingly to $167,500.00 per player.  Teams can also use allocation money to bring the cap hit down to $150,000.00 per player.  Assuming the Fire has allocation money available (from the Bakary Soumare transfer), this means the Fire can sign a designated player today and still have $93,790.00 left under the cap.

Another factor to consider is that the Fire is currently one spot under the roster limit of 24.  Further "gray area" is created by the complex structure of MLS' roster rules.  MLS teams may have 18-20 players on their senior roster.  These players make no less than $40,000.00 per year and count against the salary cap.  What confuses the equation is the rule that allows teams up to six players that do not count against the cap.  These players include Generaton Adidas players (such as Bone and Johnson), players earning the $40,000.00 per year minimum salary (the Fire have six of these - Banner, Dimitrov, Dykstra, Kinney, Lowry, and Watson-Siriboe) and home grown players.  Rosters can be increased to 26 if two additional spots are used for signing "home grown" players.  The Fire currently have no home grown player signings. 

This means that two of the six players listed above are considered to be part of the senior roster.  The remaining four could theoretically not be counted against the salary cap budget.  This could possibly free up another $160,000.00 of cap space enabling the Fire to add a second designated player if they chose to do so.  One of the $40,000.00 salaried players would need to be released in order to make room on the senior roster for a second DP.  That is of course, assuming that Martinez' roster spot is used by the first DP. 

If no DP's are signed, it is possible that the club could use the available cap space to sign  additional mid level salaried players to replace current rostered players.  This would mean that the club would likely have to pay the released player's salary for the remainder of the season since the guaranteed contract date of July 1 has passed.  As a result of the new CBA a majority of MLS player salaries are now guaranteed after July 1 if the player is at least 24 years old with three years of MLS experience. 

However, MLS rules once again provide another caveat.  A review of MLS' 2009 roster regulations shows that players 25 years old or younger that are part of the developmental roster do not have guaranteed deals and can be waived at any time.  This 2009 rule was modified in the 2010 CBA.  This category of player would seem to fit the profile for five of the Fire's six minimum salaried players (Banner has three years MLS experience so he is guaranteed).  It is unclear to what extent rules have changed with the 2010 CBA since full details have not been released. 

A third designated player spot can be purchased by any club for the equivalent of a luxury tax.  Any club can add a third DP if they pay out a $250,000.00 allocation fee that would be shared equally by all other MLS clubs (if they don't have three DP's).  I can't see any teams other than Los Angeles or Seattle attempting to even touch this one. 

According to my amateur MLS accounting skills the Fire have room available under the salary cap and flexibility with the roster which would allow Frank Klopas to pursue upgrades to the team during the summer transfer window which opens on July 15 and closes on August 14.  In terms of the MLS schedule, the Fire has only one more regular season match during the month of July and two matches in August before the window closes.  The opportunity to regain the organization's place as a serious contender by improving the roster is there to be had but August 15 will be here before we know it. 

 

 

 

 

 

 

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  • Btw, Columbus beat Charleston 3-0 in the US Open Cup tonight 3-0 while playing their second team for the majority of the match.
    http://www.mlssoccer.com/news/article/columbus-depth-display-impressive-usoc-run

  • Blanco will have a decision on his future this week.....
    http://futbol.univision.com/fifacopamundial/mexico/article/2010-07-06/cuauhtemoc-blanco-se-retirara-de-tri

  • The Fire may also still have allocation money left over from the Matt Pickens deal last season. I believe it was reported that it was over a 6 figure allocation. I can't find any link to support that however.

  • In reply to merwin:

    good point. I'll try to find that as well.

  • In reply to merwin:

    Seems to me CDLC is getting paid DP money so its my guess the Fire will not get a good DP this year. All these injuries makes the Fire look like New England...

  • In reply to merwin:

    Great post. I almost feel like I understand this stuff now.

  • In reply to merwin:

    any ideas to players they'd look at for dp (besides blanco)? what positions do you think they'd look to upgrade? omc and f?

    very confusing stuff, thanks for trying to figure it out for us.

  • In reply to Drew:

    Check out today's training report. It seems that DP candidates (other than Blanco) would be targets for next season.

  • In reply to merwin:

    Do you think that the Fire administration would look toward Europe or Mexico and South America for a possible DP?

  • In reply to fire1020:

    It's seems that they're looking everywhere. They apparently have their eye on someone whose contract expires in December.

  • In reply to fire1020:

    Great Article! I ran across this after Nery's signing... but it still leaves me with hope (and a new understanding of MLS finances) that the Fire can snag a second DP before the trade deadline. Any word on who they might be in conversation with? In order to keep pace with NY and LA... we really need more help.

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