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LAFC’s Bale deal and why they had to pay Inter Miami for his ‘discovery rights’

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Gareth Bale’s move to Los Angeles FC has taken a lot of people by surprise.

Linked with a move to Cardiff City following the expiration of his contract at Real Madrid, Bale has joined the team that tops the MLS Western Conference.

So for those who don’t follow MLS closely, who are LAFC? How much will the deal cost them? Why did David Beckham’s Inter Miami receive a payment from LAFC as part of Bale’s move? And when could he make his debut?

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Paul Tenorio explains all this and more…


I remember when David Beckham went to LA Galaxy, but who are Los Angeles FC?

LAFC is an MLS expansion team that played its first season in 2018. They hired former US national team and Swansea City coach Bob Bradley as their first coach and their first signing was former Arsenal striker and Mexico Carlos Vela. They also have several famous owners, including actor Will Ferrell, NBA Hall of Famer Magic Johnson, US Women’s National Team legend Mia Hamm, and her husband, former baseball star Nomar. Garciaparra.

LAFC has been among the best teams in the league since its launch, finishing on top in 2019 and leading the way again this season. Their success has helped them gain an immediate foothold in Los Angeles despite the Galaxy’s 22-year lead. Another big factor is that LAFC plays at Banc of California Stadium in downtown Los Angeles (the Galaxy play at Dignity Health Sports Park about 12 miles south in Carson, California). They regularly pack home games, averaging around 22,000 fans per game.

Their current coach is former Hannover 96 and US men’s national team defender Steve Cherundolo, and Juventus legend Giorgio Chiellini will join the club along with Bale this summer.


Why did LAFC have to pay $75,000 to Inter Miami for Bale’s “discovery” rights? Surely Beckham wasn’t the only person in America who knew Bale before now?

MLS operates as a “single entity” league, meaning all teams are part of the Major League Soccer umbrella company. When players sign with an MLS team, their contract is actually with MLS and not with that specific team. As part of that single-entity structure, the league wants to avoid competition between MLS teams for the same player that could drive up the price, because it would essentially be MLS trading against itself. To try and avoid that kind of competition in the transfer market, MLS created something called a “discovery list,” where each team can field up to seven players. If a player is on the Team X roster, Team Y must negotiate directly with Team X for those rights.

It’s an outdated feature of the league rules. in a anonymous survey of MLS sporting directorsthe majority chose the discovery rule as the most annoying in MLS.

“What the league is trying to avoid is still happening,” one executive said. “There are still auctions to sign players.”


What does it mean to be a “designated player”?

When Beckham joined the Galaxy in 2007, the league had to create a rule allowing clubs to sign players with salaries above the MLS salary cap. Thus came the designated player, then baptized as “The Beckham Rule.” Today, MLS teams can sign three designated players regardless of the salary cap, which is $4.9 million. Those players fit into a designated player slot, which has a maximum salary budget charge of $612,500 (or $200,000 or $150,000 if said player is 21-23 or 20 or younger) regardless of what the player is actually paid. .

There are other ways to spend above that limit: general allocation money, specific allocation money, and initiative slots from players under 22. Directed allocation money is relevant in this case because Bale did not sign as a designated player.

David Beckham, LA Galaxy


David Beckham was the league’s first designated player (Photo: AP/Mark J. Terrill)

So what is “specific allocation money”? And why is Bale going to charge so little in the first year of his contract?

Because Bale did not sign as a designated player, he must be under a roster designation which, in MLS parlance, we refer to as “target allocation money” (TAM). Under this designation, he is only allowed to earn a maximum of $1 million above the maximum budget charge on a listing, which is $612,500. Therefore, Bale’s maximum possible salary was 1.6125 million dollars. But the budget charges also take into account things like agent fees, which is probably why the LA Times reported Bale’s salary on his one-year deal as $1.3 million.

The allocation money exists, essentially, as a way to create both an internal transfer market (or trade market, if you will, in American sports) and additional budget space above the $4.9 million cap. The league started with only General Allocation Money (GAM), which is essentially a league-funded accounting currency that can be used to reduce players’ respective salary-cap charges; think of it less as cash and more as additional salary-cap space. Teams can acquire allocation money through trades or by selling players on the international market – teams that sell a player can convert up to $1.1 million of that real cash into GAM to expand their cap space. Each team also received a whopping $1.525 million in general allocation money at the start of this season from the league.

men 2015, the league introduced TAM as a way of trying to improve the level of play in MLS. The league determined it needed more balance in its roster between designated players, who made millions of dollars, and the rest, most of whom made a few hundred thousand or less. But the league wanted to keep control of What teams spent that money, so they created this new form of money allocation, TAM, which could only be used on players earning between the maximum budget charge and $1 million more than the maximum budget charge. The purpose is to increase the number of quality players in MLS by forcing teams to buy from a market of players earning between $612.5 million and $1.6125 million this year.

Each team in MLS has up to $2.8 million in TAM that they can spend per season. While GAM is a mandatory expense, has an expiration date, and will be used or traded entirely by teams, TAM cannot be traded within the league because it is completely discretionary and funded out of pocket by the owner. Teams are not required to use or use all of the $2.8 million; they can opt in and then buy it essentially with real cash from the owner.


How can anyone understand all this and why does MLS do things this way?

There are calls within MLS to accommodate how much the league has grown by simplifying roster rules and giving teams more autonomy in how they spend their money, a simple floor and ceiling that would eliminate buckets like GAM and TAM, but so far the league has been resilient.

The design of these rules was based on fiscal prudence (slow, steady growth that would prevent the kind of spending that collapsed the old NASL), but the league is now at a point where the vast majority of teams are owned by billionaires and there is a level of permanence that has never existed before in American football; namely, the stadiums and training facilities that have been built for billions of dollars, collectively, across the league.

There is a sense that the league is ready to grow into its rulebook which will better align it with the growth of the game and the league, but so far any changes have only created more rules rather than simplifying the system.

Until those changes actually happen, stick with this MLS glossary.


Will Bale get a chance to buy an MLS team like Beckham did?

MLS commissioner Don Garber has said the league will never again award the rights to an expansion franchise as part of a player’s contract. That makes sense. When Beckham was given the option in his contract to buy an MLS team for $25 million, Real Salt Lake’s expansion fee two years earlier was $10 million. When Charlotte joined MLS this season, owner David Tepper paid a $325 million expansion fee. That figure is indicative of the growth of the league in this country during the last 15 years.

So no, Bale doesn’t have that option built into his contract.


When will Bale make his debut?

He will be eligible to play as soon as the MLS secondary transfer window opens on July 7 and the transfer can be made official. LAFC will play next night against their cross-town rivals, the LA Galaxy, on July 8.

(Top photo: Gareth Bale/Twitter)

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