I’m as guilty as anybody. When writing and talking about Major League Soccer trades and transfers, I often blow past two of the league’s most used and least understood acronyms: TAM and GAM.
These letters stand for the two types of allocation money that are used to buy and sell players, and balance budgets, in MLS. TAM stands for targeted allocation money, while GAM is shorthand for general allocation money.
If you’re a casual fan of an MLS team, or even a diehard who doesn’t nerd out on roster rules, the phrase “$200,000 in TAM” might as well be a sum of Monopoly money. And the funny part is, allocation money in MLS is kind of like board game money. It’s not really tangible, but knowing what it does and how to use it is absolutely key to understanding how well your team is built.
It’s also kind of complicated and tedious to explain every time it comes up. In this article, I’m going to try my best to give you a base level explainer on TAM and GAM.
Why do TAM and GAM exist?
The first concept you need to grasp here is the salary budget, or salary cap, that MLS teams are forced to abide by. If you follow other American sports leagues, this should be a familiar concept. In soccer, it’s less common.
MLS sets a limit on how much money teams are allowed to spend on their rosters in this season. This serves two main purposes. First, it keeps overall league spending under control. Second, it regulates parity. If every squad costs relatively the same, logic says that the league should remain fairly competitive from top to bottom.
In 2022, the salary budget for MLS is set at $4.9 million per team. Except that teams are allowed to spend more than twice that much on player salaries. Make sense? Of course not. That’s where TAM and GAM come in.
By instituting these mechanisms for how teams are able to spend their money, MLS has been able to control spending while increasing the quality of players who have entered the league over the past few years.
This year, each club receives $1.625 million in GAM and up to $2.8 million in TAM that may be used in roster construction.
OK, so what’s the difference between GAM and TAM?
We’ll get into the more detailed explanations of each mechanism below, but if you take nothing else from this article, remember this:
TAM is reserved for players at the top end of the roster who earn more than the maximum salary budget charge of $612,500.
GAM can be used in relation to any player on the senior roster.
GAM can be traded between teams, but TAM cannot be traded.
But what are they used for?
Although they have different rules surrounding their uses, TAM and GAM serve essentially the same purpose. They are both used as additional funds that teams can spend on players beyond the salary budget.
Each player on the 20-player senior roster has a Salary Budget Charge attached to his name. This is the amount that he counts against the $4.9 million limit. The maximum charge for a player is $612,500. That’s the charge for a Designated Player, even though those players often make millions of dollars per year. The senior minimum in 2022, which is also the number assigned to unused senior roster spots, is $81,375.
Loan and transfer fees are also used when calculating a player’s budget charge, with the fee spread out over the length of a player’s contract. (For example, if a player is bought for $1 million and signed to a four-year deal, an additional $250,000 would be assigned to the player’s budget charge each season.)
To comply with the budget, clubs must determine how best to use their GAM and TAM. The action most associated with GAM and TAM is known as the “Buy-Down.”
What does it mean to “Buy-Down” a player’s salary?
OK, so now you know the basic rules. Teams get $4.9 million to spend on the senior roster. Each player costs at least $81,375, but no player costs more than $612,500.
In order to pay players more than their assigned budget charge, clubs “Buy-Down” their salaries using GAM and TAM. I’ll provide some examples below.
General Allocation Money (GAM) and its uses
GAM is a bit mysterious, if only because we don’t really know which players teams are using their GAM on. You mostly see it referenced in relation to trades, as TAM cannot be traded between clubs.
When it comes to GAM, the main rules are that a player’s budget charge can only be reduced by up to 50%, not including loan or transfer fees which may be reduced by 100%. GAM can also be used to reduce a DP or TAM-level (above $612,500 salary) to a limit of $150,000.
Example: A player makes $500,000 per year. Team uses $250,000 in GAM to reduce his budget charge by 50% to $250,000.
Targeted Allocation Money (TAM) and its uses
TAM was created in 2015, and has been largely responsible for the influx of foreign talent to the league since then. It’s allowed teams to pursue players whose salary and transfer fees exceed the maximum budget charge without having to assign them DP status. The ceiling for these players in 2022 is $1.625 million — $1 million above the max budget charge.
We have more concrete examples of these moves because they’re more obvious. In addition to signing new players with TAM, clubs can re-sign existing players who earn above the max and convert DPs to non-DP status.
Example: Austin FC signed Alex Ring from New York City FC in 2021. MLS Player Association salary figures showed that he made $1 million, but Ring was not a DP at the time. Austin used TAM to buy down Ring’s salary below the max budget charge.
Why is this so complicated and secretive?
Good question. This is a constant gripe of MLS fans and media. TAM and GAM would make a lot more sense to the casual observer if we knew how much of it teams were using on certain players and how much allocation money clubs held at any given time.
Unfortunately, MLS and its clubs hold their cards tight to the vest. There’s at least one good reason for that, and it’s because general managers are constantly negotiating with clubs from other leagues. Publicly releasing how much a team is able to spend on its roster would be bad for those negotiations.
Still, it’s worth discussing whether the league would better serve its fans — and even front offices who are often befuddled by overly complex rules — by simplifying things.
What other questions do you have about TAM and GAM? Are there other MLS rules that you’d like to have explained? Let us know in the comments?