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In addition to the Salary Budget, each MLS club may spend additional funds on player compensation including money from a League-wide allocation pool (General Allocation Money), discretionary amounts of Targeted Allocation Money, the cost of Designated Players outside the Salary Budget, the cost of U22 Initiative Slots outside the Salary Budget, and money spent on the Supplemental Roster (roster slots 21-30).
A club may have no more than ten players on its Supplemental Roster, subject to the Season-Ending Injury, Injured List, and Loan exceptions. All Generation adidas players are Supplemental Roster players during the initial guaranteed term of their contract.
Any player who meets the requirements to qualify as a Homegrown Player as a member of an MLS club academy, either in the U.S. or Canada, or has met similar requirements as a member of a Canadian Approved Youth Club, will count as a domestic player (i.e., he will not occupy an international roster slot) on both U.S. and Canadian club rosters provided that:
In 2023, a total of 233 international roster slots are divided among the 29 clubs. These roster slots are tradable, in full season increments, such that some clubs may have more than eight and some clubs may have less than eight during any given season. With trades, there is no limit on the number of international roster slots on each club's roster.
Generation adidas is a joint program between MLS and adidas that is dedicated to developing exceptional talent in a professional environment. Each year, a handful of top collegiate underclassmen and youth national team players are signed by the League with the majority of such players entering the League through the MLS SuperDraft. Until the end of the guaranteed term of his contract up to three years, Generation adidas players are on a club's Supplemental Roster.
The Designated Player Rule allows clubs to acquire up to three players whose total compensation and acquisition costs exceed the Maximum Salary Budget Charge, with the club bearing financial responsibility for the amount of compensation above each player's Salary Budget Charge. Designated Players may be new players signed to MLS via the Discovery Process, or they may be re-signed existing players on a club's roster.
In 2023, a Designated Player who is at least 24 years old during the League Year will carry the Maximum Salary Budget Charge ($651,250) unless the player joins his club after the opening of the Secondary Transfer Window, in which case his budget charge will be $325,625.
A Designated Player who is 23 years old (or younger than the age of 23) during the League Year (the age of the player is determined by year - not date - of birth) will carry the following Young Designated Player Salary Budget Charge:
In the event a player occupying a U22 Initiative Slot is transferred outside of the League, 100% of the proceeds of the sale (i.e., after out-of-pocket amounts are recouped) will be paid to the Club and such amounts may be converted to General Allocation Money based on the below sliding scale:
A player must occupy a U22 Initiative Slot for a minimum of two seasons; provided, however, if the compensation (including acquisition fee, loan fee, and/or conditional compensation) amortized over the first three years is greater than the Maximum Salary Budget Charge, then he must occupy a U22 Initiative Slot for a minimum of three seasons.
Prior to meeting the minimum slot occupation length, a Club may: transfer the player out of MLS, remove the player from a U22 Initiative Slot using Targeted Allocation Money, loan the player outside of MLS, utilize its one Off-Season Buyout, or transition the player to a Designated Player slot.
If the contract of a player occupying a U22 Initiative Slot is renegotiated prior to meeting the minimum slot occupation length, the League will not reclassify the player and he must continue to occupy a U22 Initiative Slot or Designated Player slot depending on compensation.
If a Special Discovery Player is transferred to a non-MLS Club prior to the expiration of the term of his contract, any remaining unamortized acquisition costs would be charged immediately to a Club Salary Budget. If a transfer fee is received for the player, any unamortized acquisition costs, including the acquisition cost charged to the Club Salary Budget during the MLS Season such transfer occurs, may be recouped prior to any sharing arrangement with the League. Any guaranteed compensation due to the player will continue to be charged to a Club Salary Budget.
Most draft prospects are NCAA college seniors who have exhausted their college eligibility. Generation adidas Players and non-collegiate international players are also eligible for selection in the MLS SuperDraft. Clubs may nominate players for the League's Draft-Eligible List, and only players from that list may be selected.
Unless claimed on Waivers, a player who was drafted by a particular club through the MLS SuperDraft and did not sign with the League is placed on that club's "College Protected List" until December 31 of the year after the draft (i.e., for MLS SuperDraft 2023, until December 31, 2024), after which the club loses the priority rights to sign the player.
Players, General Allocation Money, international roster slots, college protected player priority, Discovery Priority, and Homegrown Player priority in addition to selection position in MLS SuperDraft, Re-Entry Process, and Waivers may all be exchanged in trades approved by the League, provided all of the necessary rules regarding roster and Salary Budget compliance are met and the trade is completed during a valid trading period.
Pursuant to the Discovery Process, clubs may scout and sign players who are not yet under contract to MLS and who are not subject to another assignment mechanism (e.g., MLS SuperDraft). To sign a player through the Discovery Process, the club must first place the player on its Discovery List. A club may have up to seven players on its Discovery List at any time and may remove or add players at any time. There is no limit to how many players a club can sign from its Discovery List.
Players who were previously on the Allocation Ranking List will now be eligible for the Discovery Process. Future players transferred out of Major League Soccer will become discoverable one week from when the player's ITC is permanently transferred and the League has notified all clubs.
If one or more clubs attempt to add the same player to their respective Discovery Lists, the club that filed the claim on the earlier date will have the priority right to sign the player. If one or more clubs submit a discovery request on the same day, then the club with the lowest points-per-game in the current MLS Regular Season (all clubs must have played a minimum of three regular season games) will have the priority right to sign the player.
If a club wants to sign a player on the Discovery List of another club that has higher Discovery priority on the player, it may offer that club $50,000 in General Allocation Money in exchange for the right to sign the player. The club with the player on its Discovery List will then have five days (or three days during the Secondary Transfer Window) to either (i) accept the General Allocation Money and pass on the right to sign the player or (ii) make the player a genuine, objectively reasonable offer.
All terms of any arrangements among an MLS club, a related party club, and a player to be signed to MLS shall be fully disclosed to the League. A player joining an MLS club from a related party club will calculate his Salary Budget Charge based on the compensation he is receiving from his related party club contract and any acquisition fees associated with his signing. The League will make a final determination, in its sole discretion, as to the Salary Budget Charge of such a player.
The Re-Entry Process will commence after MLS Cup. The priority order for the Re-Entry Draft is the reverse order of finish in 2023, taking into account playoff performance. Players who are available to be selected in Re-Entry Draft include all option decline and out of contract players who are 22 years old or older with at least one MLS service year and who are not eligible for Free Agency.
Players who are not selected in Stage One of the Re-Entry Draft will be made available in Stage Two. If a player is selected in Stage Two, the drafting club will be required to make a genuine offer to the player. If an agreement cannot be reached between the drafting club and the player, the drafting club will hold the Right of First Refusal for that player in MLS. Clubs may not select their own draft-eligible players in Stage Two until all other Clubs have declined on selecting such players.
A player may choose to opt out of the Re-Entry Process prior to Stage One and/or Stage Two of the Re-Entry Draft. In such instances, the Right of First Refusal for the player will remain with his previous club.
A club may place a player on Waivers at any time during the regular season at which point he is made available to all other MLS clubs. The Waiver Claiming Period shall commence on the first business day after the League delivers notice to clubs and expires at 5 p.m. ET on the second business day. If a player is not selected off Waivers ("clears Waivers") then that player is available to all MLS clubs on a first-come, first-served basis.
If a player with a guaranteed contract is waived, any interested MLS club will have 48 hours from the notice of Waivers to claim the player by notifying the League of the intention to claim the player and the amount of the player's Salary Budget Charge they wish to assume. The player will be awarded based on a number of factors, including but not limited to, which club is willing to absorb the highest Salary Budget Charge. If the highest Salary Budget Charge is submitted by more than one club, the player will be awarded based on the Waiver Order.
A club may sign a player, age 25 or younger during the league season, from its affiliate (MLS NEXT Pro) to a maximum of four Short-Term Agreements (up to four-day contracts) each season (maximum of 16 days).
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