Sporting Kansas City announced Thursday that the club has acquired $100,000 of General Allocation Money (GAM) in a trade with D.C. United. In exchange, D.C. United will receive $140,000 of Targeted Allocation Money (TAM).
Targeted Allocation Money (TAM) are funds provided by Major League Soccer to teams to add or retain high value players and can be used to buy down the budget charge of a player making more than the maximum budget charge in annual compensation. Starting in 2015, each team initially received $100,000 in TAM per year for the next five years. MLS has since increased the amount of TAM issued to each team: $800,00 for 2016, $1.2 million for 2017, and $1.2 million per year plus an additional $2.8 in optional, discretionary TAM for 2018 and 2019.
General Allocation Money (GAM) is an annual allotment of money that is available to a club in addition to its salary budget. GAM can be used to sign players who are new to Major League Soccer, to re-sign an existing MLS player, to offset loan and transfer fees, to extend a new MLS player’s contract for a second year and to reduce the Salary Budget Charge of a Designated Player to a limit of $150,000.
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Transaction: Sporting Kansas City (MLS) receives $100,000 of General Allocation Money from D.C. United (MLS) in exchange for $140,000 of Targeted Allocation Money.