Post by acdc on Jul 31, 2008 9:16:13 GMT -6
I'm just going to set some facts before you read this gigantic post.
* DP Players are payed by the teams from their own pockets.
* A team is allowed a max of 2 DP players.
* $400,000 of the DP's Salary is charged towards the team's salary cap.
* Only $350,000 of the teams second DP's salary will count towards the salary cap.
* A player cannot earn more than 400K per year unless he is a DP. (Donovan is "grandfathered" under the rule and allowed to be payed more than 400k through the 2007 and 2008 season. He will be forced to renegotiate his contract after this season. Which could mean a pay cut, become a DP, or move overseas).
So I did some digging on the Internet late last night. As it turns out, the MLS does not disclose its salary cap level. I crunched some numbers and came up with a average of 2.1 mil in total salary per team. Designated players excluded. Rumor is that the salary cap is between 2mil and 2.5mil. Lets assume its 2.3mil. Only $400,000 of the DP's salary counts towards the salary cap. This in effect is the "Beckham Rule" where the galaxy are able to afford Beckham without going past the salary cap. So how do teams keep signing players? There is a "Base Salary", which the salary cap is based on, and there is "Guaranteed Compensation" which are given through incentives in their contracts such as bonuses and all that good stuff. This means a player's Base Salary may be low while their Guaranteed Compensation may be really high.
Beckham
Beckham is a DP earning around 5 mil per year on Base Salary, only of which $400k count towards the salary cap. 6.5mil in Guaranteed Compensation through incentives. Since only $400k of Beckham's salary counts towards the salary cap, the galaxy are able afford other players as well and still be under the cap. The team has to pay the DP out of their own pockets anyway which in essence reduces the salaries other players could be getting. This is why I think the DP rule is pointless. An increase in the Salary cap will accomplish the same thing but without the DP rule and its limits. What does this mean? While the Galaxy may have a superstar in Beckham, they will probably not surround him with star caliber players.
Big Name Signings
While its certainly a nice idea to carry around, its just not happening anytime soon. Unless the MLS drastically increases its Salary Cap and removes the DP rule. With the current system teams could only have 1 or 2 Beckhams. The DP Rule says a team must not have more than 2 Designated Players. Beckham and lets say Henry would combine for a total of 750K of the teams salary cap (without counting their base salaries and guaranteed compensations). So its certainly possible that Henry and Beckham could play on the same team but this will not even come close to the level of competition in Europe. The Galaxy could not afford anymore talented players and would be stuck with "scrubs" with some earning as low as 12k per year. Same example could be set for every other team in the league. Now one way around that would be to have, lets say Ronaldinho, sign with the Galaxy for less than 400k base salary and have a guaranteed compensation be through the roof. This would of course come through bonuses, marketing and ad campaigns and so forth. But does anyone see Ronaldinho taking that DRASTIC pay cut?
MLS and the Future
It doesn't take a genius to figure out that the MLS will be forced to change their salary cap and DP rules soon. If the league expects to sign big name and talented players from Europe and all over the world then they have to change the current system.
Solutions
First the League has to raise the salary cap to at least 10mil. Then Remove the DP Rule. This will cause teams to be able to afford more than 2 DP players on their teams and more and more talented players can be signed. Keeping the salary cap will still balance the league so thats good. Anyone still reading this, I admire your determination of getting through this post but its really some informative stuff I had to share. Any thoughts?
* DP Players are payed by the teams from their own pockets.
* A team is allowed a max of 2 DP players.
* $400,000 of the DP's Salary is charged towards the team's salary cap.
* Only $350,000 of the teams second DP's salary will count towards the salary cap.
* A player cannot earn more than 400K per year unless he is a DP. (Donovan is "grandfathered" under the rule and allowed to be payed more than 400k through the 2007 and 2008 season. He will be forced to renegotiate his contract after this season. Which could mean a pay cut, become a DP, or move overseas).
So I did some digging on the Internet late last night. As it turns out, the MLS does not disclose its salary cap level. I crunched some numbers and came up with a average of 2.1 mil in total salary per team. Designated players excluded. Rumor is that the salary cap is between 2mil and 2.5mil. Lets assume its 2.3mil. Only $400,000 of the DP's salary counts towards the salary cap. This in effect is the "Beckham Rule" where the galaxy are able to afford Beckham without going past the salary cap. So how do teams keep signing players? There is a "Base Salary", which the salary cap is based on, and there is "Guaranteed Compensation" which are given through incentives in their contracts such as bonuses and all that good stuff. This means a player's Base Salary may be low while their Guaranteed Compensation may be really high.
Beckham
Beckham is a DP earning around 5 mil per year on Base Salary, only of which $400k count towards the salary cap. 6.5mil in Guaranteed Compensation through incentives. Since only $400k of Beckham's salary counts towards the salary cap, the galaxy are able afford other players as well and still be under the cap. The team has to pay the DP out of their own pockets anyway which in essence reduces the salaries other players could be getting. This is why I think the DP rule is pointless. An increase in the Salary cap will accomplish the same thing but without the DP rule and its limits. What does this mean? While the Galaxy may have a superstar in Beckham, they will probably not surround him with star caliber players.
Big Name Signings
While its certainly a nice idea to carry around, its just not happening anytime soon. Unless the MLS drastically increases its Salary Cap and removes the DP rule. With the current system teams could only have 1 or 2 Beckhams. The DP Rule says a team must not have more than 2 Designated Players. Beckham and lets say Henry would combine for a total of 750K of the teams salary cap (without counting their base salaries and guaranteed compensations). So its certainly possible that Henry and Beckham could play on the same team but this will not even come close to the level of competition in Europe. The Galaxy could not afford anymore talented players and would be stuck with "scrubs" with some earning as low as 12k per year. Same example could be set for every other team in the league. Now one way around that would be to have, lets say Ronaldinho, sign with the Galaxy for less than 400k base salary and have a guaranteed compensation be through the roof. This would of course come through bonuses, marketing and ad campaigns and so forth. But does anyone see Ronaldinho taking that DRASTIC pay cut?
MLS and the Future
It doesn't take a genius to figure out that the MLS will be forced to change their salary cap and DP rules soon. If the league expects to sign big name and talented players from Europe and all over the world then they have to change the current system.
Solutions
First the League has to raise the salary cap to at least 10mil. Then Remove the DP Rule. This will cause teams to be able to afford more than 2 DP players on their teams and more and more talented players can be signed. Keeping the salary cap will still balance the league so thats good. Anyone still reading this, I admire your determination of getting through this post but its really some informative stuff I had to share. Any thoughts?
all I wanted to find out was the salary cap level but then I got carried away 
. Every year they increase the cap by 200k. So next season the salary cap will be 2.5 to 3mil. Thats really low and that not nearly the increase i want. Plus they should remove the DP rule or at least allow teams to have more than just 2 DP's.