Good news for Galaxy: MLS increasing salaries without touching payroll cap

For the second time in five months, Major League Soccer is increasing the amount teams can pay their players without altering the league-wide salary cap, part of a new $35-million investment in compensation that will be spread out over the next two years.

MLS announced Wednesday that teams will receive $800,000 in so-called “target allocation money” for the 2016 season and an equal amount for 2017, money that can be used on players whose contracts would otherwise violate league salary rules. In July the league gave teams a maximum of $500,000 in such funds.

The payroll relief is something the Galaxy had anticipated heading into a busy offseason. MLS allows teams to carry up to three “designated players” whose salaries exceed the league maximum of $457,500; the Galaxy has four such players – forward Robbie Keane, midfielders Steven Gerrard and Giovani dos Santos and defender Omar Gonzalez – all of whom made more than $1.4 million in 2015.

The team used last summer’s outlay of money to buy down Gonzalez’s contract, freeing up the designated player spot it needed to sign Dos Santos. The Galaxy could use the new wave of allocation money in a similar fashion and though that wouldn’t get Gonzalez completely under the limit, the new rules would allow the Galaxy to trade for funds to close the gap.

Todd Durbin, an executive vice president with MLS, said the $42 million in target allocation money the league has made available between 2015 and 2017 is intended to strengthen the middle of team rosters.

“We needed to have more depth to get better,” Durbin said in a conference call Wednesday.

The designated player rule, adopted in 2007 and expanded in 2010, helped the league to sign big-name internationals such as Kaka, Frank Lampard and Gerrard – players who were paid $115 million combined in 2015. But it didn’t little to improve the rest of a team’s roster.

Target allocation money changes that by allowing teams to drive more resources to the rest of a team’s starting 11. Players can now be paid more than the league maximum without invoking a designated player exemption. Just as important, salary paid with target allocation money won’t count against the league salary cap, which was $3.49 million in 2015.

The league is also more than doubling the limit teams can spend on homegrown players, from $50,000 in 2015 to $125,000 next season. MLS clubs have signed more than 150 players under the homegrown player initiative since 2007, the Galaxy’s Gyasi Zardes among them.

“Our academies are developing more first-team players every year and the additional investment will provide more flexibility to our clubs to sign top young players,” Durbin said.