Major League Soccer has announced that the LA Galaxy violated salary budget and roster guidelines during the 2019 season due to the improper classification of former player Cristian Pavón's salary.
The Galaxy brought the Argentine on loan from Boca Juniors that summer. According to an MLS news release, "The LA Galaxy entered into agreements that were not disclosed that included payments that were not accounted for in the calculation of Cristian Pavón’s salary budget and roster category."
Pavón was classified as a Targeted Allocation Money (TAM) player, but should've been labeled as Designated Player because of the undisclosed payments, the league found. The Galaxy at the time had all three available DP spots filled with Jonathan Dos Santos, Zlatan Ibrahimović, and Romain Alessandrini. Pavón would become a DP after Alessandrini left the club in 2020. The violations occurred under the tenure of former club general manager Dennis te Kloese.
The Galaxy will have to pay a $1 million fine and lose $1 million of future General Allocation Money, and will also be banned from acquiring a player who requires the acquisition of an International Transfer Certificate from outside the United States or Canada during the 2023 MLS secondary transfer window.
Current LA Galaxy president Chris Klein will also be suspended from all sporting-related activities for a year and Greg Vanney will assume sporting director duties, reporting directly to AEG President and CEO Dan Beckerman. And te Kloese will be required to submit an application with the Office of the Commissioner should he return for employment with an MLS club.
"From the outset the LA Galaxy and AEG have fully cooperated with MLS to ensure a thorough and transparent process and we accept the outcome and sanctions set forth in this ruling," an LA Galaxy club official told The Striker.
What does it mean for future transfers?
The Galaxy at least have a little time to prepare for the transfer sanctions, given they can still sign players during the 2023 primary window that begins before the season starts. However, last year LA acquired two crucial players in the secondary window, midfielders Riqui Puig and Gaston Brugman, who both contributed to their strong form to end the campaign.
That adds urgency to possible rumored moves like a swoop for current free agents Cristiano Ronaldo or Luis Suarez, and to make a potential decision on the future of Kevin Cabral and the DP spot and international roster slot he occupies.
Then there's the matter of the $1 million in GAM, which is the primary trading asset for making intra-league trades and is also used to buy down a player's salary budget charge. It is likely to complicate both transfer windows for LA this season.
Vanney at the helm
Greg Vanney has never filled the two roles of head coach and sporting director, but he was close in Toronto FC as the team's head coach and technical director, making him the person second in charge of personnel decisions through the end of his tenure in 2020.
Toronto made some of the biggest signings in the league during his tenure, including the acquisition of 2020 MLS MVP Alejandro Pozuelo and the return of American stars Michael Bradley and Jozy Altidore to MLS. Of course, TFC was not operating within financial restrictions at the time, and was one of the higher-spending clubs on Designated Players throughout that span.