Buying Success: Does spending matter in MLS?

Brian McKinney -

When it comes to the balance sheet, soccer is a depressingly simple sport. Teams that spend more on player wages almost always win more. The numbers from the biggest leagues in the world back this up.

As the Seattle Sounders have struggled this season, the diagnosis from many fans has reflected this. They have fallen behind the top spenders in the league, and should have expected as much. Despite this, Sounders majority owner Adrien Hanauer made the bold claim recently that “It’s pretty hard to find any correlation to how much you spend to winning championships”. For many, this seems to be proof that the Sounders have become unambitious. That the mentality or means to compete with the big dogs is gone. Looking at the data, however,  Hanauer is right.

Major League Soccer’s salary cap rules are a byzantine mess that makes analyzing the public data we have difficult. Here’s an explainer to get you started. What matters most for our purposes are the “Senior Maximum” and “Max-TAM” limits. These cut-off points dictate how much individual players can be paid and with what source of money.  A few caveats and broad explainers before we dive into the numbers: 

  1. We’re not able to see what roster mechanism is actually being used by a team for any given contract. While salary info is public, things like transfer and agent fees are not. Many player’s cap hit is higher than their published salary due to these kinds of fees that don’t get counted in their wages.  Instead, we’re using the Senior-Max and Max-TAM as dividing points to split the roster into a low, middle, and high salary range. Above the Max-TAM limit, we know a player has to be a Designated Player. 
  2. Each team gets up to three Designated Players and can pay these players any amount of money without affecting how much they hit the salary cap. 
  3. GAM, which allows a team to spend freely* on any player making less than the Max-Tam limit, is tradable between teams. Teams can also convert part of transfer fees for selling players abroad into GAM. So, unlike other salary cap systems, the total amount each team is allowed to spend is not fixed.
  4. For reference, the 2024 Senior-Max is 683,750 and the Max-TAM limit is 1,683,750. It increases slightly every year. 

* - like everything in the world of MLS roster rules, the Codex Justinianus is probably more comprehensible than the rules governing GAM. GAM is as close to “normal” money as you get within the MLS internal economy, that’s all that matters for what we’re looking at now.