MLS rule changes

Last Tuesday, Major League Soccer owners voted to implement three major rule changes to the way teams can build their roster.

The three new rules are an adjustment to the number of designated players and U-22 initiative slots an MLS team can have, an increase in the number of contract buyouts teams can use, and expanding the benefits of player sales.

Designated players and U-22 initiative spending

This is the biggest change to MLS spending.

The designated player rule allows teams to sign players whose salary exceeds the cap. In 2024, each designated player has a salary charge of $683,750 against the total cap meaning a player could be paid millions of dollars but only count for $683,750 against the team's cap.

U-22 initiative players are players signed at or before the age of 22. Similarly to designated players, U-22 players can be paid extra money but will only count for a maximum of $200,000 against the cap.

Previously, if MLS teams had three designated players they were only allowed one U-22 initiative slot. If teams forwent their third designated player slot, they were allowed three U-22 initiative slots.

With the new rules, MLS teams can have three designated players and three U-22 slots, or two designated players, four U-22 slots and $2,000,000 in general allocation money.

The change gives MLS teams more flexibility allowing them to choose whether to spend money on top-end talent or spread their funds over the rest of the roster.

The MLS understands the need to capitalize on the increased viewership of the league due to Lionel Messi and the upcoming 2026 World Cup. The league is giving teams the option to spend serious money on experienced players without sacrificing young talent.

Contract buyout rules

A smaller rule change, but the MLS will increase the number of contract buyouts from one per season to two.

The rule change allows MLS teams to more easily move on from bad signings. A few Squads, such as Miami, have already used buyouts this season and will get an extra buyout to use as needed. This change is especially rewarding to bigger clubs that have more incentive to make risky signings knowing that if a signing fails the club can move on from a player with ease.

Increase in GAM for player transfers

Currently, teams can only transform $1,215,506 of revenue from a single loan or transfer into general allocation money. With the new changes that figure will increase to $3,000,000 per transfer.

This rule will benefit smaller clubs that may only sell one player per year. For example, when the Vancouver Whitecaps sold Alphonso Davies for $22 million, they could only turn $1,215,506 of the transfer fee into GAM. If Vancouver had sold two players for a total of $4,000,000, they could have converted $2,400,000 into GAM.

Owen Cameros is a first-year majoring in broadcast journalism. To contact him, please email ohc5024@psu.edu.