New MLS roster rules expand roster flexibility

The long-rumored changes to the MLS roster rules were made official on Thursday, adding flexibility at the same time that the summer transfer window opened.

The main elements of the new rules are that all teams are now permitted to have at least three U22 Initiative players regardless of how they are using their Designated Player spots. Previously, teams with three “true” DPs were limited to just one U22 player. The other change is that teams with two “true” DPs are now allowed to have a fourth U22 player as well as an additional $2 million in General Allocation Money.

Teams must declare which avenue they intend to take at the start of the year. For this year, teams are limited to collecting just $1 million in additional GAM since it is being implemented at midseason. One other wrinkle to the additional GAM is that it’s owner-funding, meaning teams must effectively buy the increased roster-cap flexibility from the league.

Separately, MLS also changed the rules around the conversion of transfer fees into GAM. Teams can now convert up to $3 million a year in incoming transfer fees into GAM with no limit on how much can be converted from one move. Under previous rules, teams were only allowed to convert $1,215,506 of any single transfer fee into GAM.

For the Seattle Sounders, there is no immediate change. Under the old rules, Pedro de la Vega’s status as a Young DP already gave the Sounders the ability to add three U22 players, of which they had used two spots on Léo Chú and Josh Atencio. Although de la Vega has a reduced salary-cap hit, for the purposes of the new rules he still counts as a “true” DP.

Beyond this year, it will be interesting to see which path the Sounders choose. In a sense, the cheaper and more reliable option would be to go with the 3+3 model as nothing is forcing teams to spend big on all three DPs, whereas maximizing the use of all four U22 spots would require a significant spend on transfer fees.

These rules do, however, make the potential sale of players like Obed Vargas or Reed Baker-Whiting considerably more beneficial. Although teams are allowed to keep 100% of the proceeds from the transfer of Homegrown Players, they were limited in how much of that could be converted to GAM. Additionally, it also incentivizes the Sounders to space out their moves, as each is likely to bring in a transfer fee that is high enough to get the maximum GAM available.