Designated Player Rule

The Designated Player Rule, nicknamed the Beckham Rule, was adopted as part of the salary cap regulations of Major League Soccer for the 2007 season. The rule allows each MLS franchise to sign players that would be considered outside of the team's salary cap, allowing MLS teams to compete for star players in the international soccer market.

History

The team salary cap was estimated to be around US$1.9 million in 2006, was $2.1 million in 2007, and was raised to $2.3 million for the 2008 season. As part of the 2010 Collective Bargaining Agreement between MLS and the MLS Players' Union, the 2010 salary cap will be $2.55 million with an automatic five percent increase each year until the expiration of the agreement at the end of the 2014 season.

Under the 2007 rule:

• The rule expires at the end of the 2009 season, and must be renewed then or allowed to lapse.
• For each Designated Player, $400,000 of his salary is charged to the salary cap and paid by the league, with any remaining salary being paid by the team's owner. This value was increased for the 2009 season to $415,000.
• Prior to the 2007 season, there were three players whose salary exceeded $400,000. These players were Landon Donovan, Carlos Ruiz and Eddie Johnson. According to the rule, these players were grandfathered in for the 2007 season, and the exemption was extended after the 2007 season, with the league planning to review the issue at a future date. It was possible that the league would be required to renegotiate these players' contracts or consider them Designated Players. However, prior to the start of the 2008 season, Johnson moved to Fulham of the Premier League[1], while following Dwayne De Rosario's signing by Toronto FC in January 2009, Ruiz was released by the club and left MLS to play for Olimpia Asunción. This left Donovan as the lone player whose 2009 salary remained grandfathered under the exemption provision. However, there were several more players whose guaranteed salary exceeded the Designated Player amount, but whose salary cap expense was actually lower than their true salary due to the allocation rule. These players include Shalrie Joseph ($450,000), Christian Gomez ($430,000), Dwayne De Rosario ($425,750), and Taylor Twellman ($420,000).
• Each team initially had one Designated Player spot, but could trade their Designated Spot to another team; teams were allowed a maximum of two Designated Players.
• Only $325,000 of a team's second Designated Player counted against the salary cap, which was increased to $335,000 in 2009.

The 2010 changes:

• The rule has no expiration date.
• For each Designated Player, $335,000 of his salary is charged to the salary cap and paid by the league, with any remaining salary being paid by the team's owner. This amount is halved for Designated Players signed in the middle of the season. The salary cap value of Designated Players can also be reduced using allocation money. Finally, teams whose Designated Players transfer abroad in the middle of a season can recoup part of the Designated Players' salary cap value.
• Landon Donovan is no longer grandfathered into the rule and must be considered a Designated Player.
• Each team is allowed two Designated Player spots, and they can no longer trade their Designated Player spots. The New York Red Bulls will receive $70,000 in allocation money in return for the nullification of their 2007 trade with Chivas USA for an additional Designated Player spot. This means that both New York and Chivas USA will have two Designated Player spots for the 2010 season.
• Teams can pay a $250,000 "luxury tax" for the right to sign a third Designated Player. This $250,000 would be distributed equally to all MLS teams that have not signed a third Designated Player in the form of allocation money.

Background

The rule is informally named after football star David Beckham, in anticipation of MLS teams signing lucrative deals with internationally recognized players of Beckham's caliber. As it turned out, Beckham was indeed the first player to be signed under this rule, signing a lucrative contract with the Los Angeles Galaxy for up to a $250 million increase in Beckham's total compensation over five years, with a base salary of $6.5 million per year in direct salary. The rest of Beckham's increased earnings would come from Beckham regaining the entirety of his image rights, which Real Madrid had owned fifty percent of, effectively doubling his existing endorsement income, as well as new endorsement deals, a share of jersey sales, bonuses, etc.

Current Designated Players

Year Signed	Player	Current club	Salary
2007	David Beckham	Los Angeles Galaxy	$6,500,000
2007	Juan Pablo Ángel	Los Angeles Galaxy	$n/a
2009	Julian de Guzman	Toronto FC	$1,717,546
2010	Landon Donovan	Los Angeles Galaxy	$2,127,778
2010	Branko Bošković	D.C. United	$516,200
2010	Thierry Henry	New York Red Bulls	$5,600,000
2010	Álvaro Fernández	Seattle Sounders FC	$300,000
2010	Rafael Márquez	New York Red Bulls	$5,560,000
2010	Omar Bravo	Sporting Kansas City	$n/a
2010	Álvaro Saborío	Real Salt Lake	$n/a
2010	Fredy Montero	Seattle Sounders FC	$n/a
2011	Eric Hassli	Vancouver Whitecaps FC	$n/a
2011	Andrés Mendoza	Columbus Crew	$n/a
2011	Fabián Castillo	FC Dallas	$n/a

Notes

• Chart indicates when players signed their Designated Player contract, not necessarily their first year in MLS.
• Player salaries include compensation from their MLS contract, not including any bonuses or compensation from contracts with individual teams or their affiliates.

Past Designated Players

Year/s Played	Player	Club/s	Average Salary
2007–2010‡†	Luciano Emilio	D.C. United	$516,043
2007–2008	Claudio Reyna	New York Red Bulls	$1,250,008
2007–2009	Cuauhtémoc Blanco	Chicago Fire	$2,759,086
2007	Denílson	FC Dallas	$879,936
2008	Marcelo Gallardo	D.C. United	$1,874,006
2008–2009, 2010†	Claudio López	Kansas City Wizards, Colorado Rapids	$373,333
2008–2010‡†	Guillermo Barros Schelotto	Columbus Crew	$463,750
2009–2010, 2010	Freddie Ljungberg	Seattle Sounders FC, Chicago Fire	$1,314,000
2009–2010	Luis Ángel Landín	Houston Dynamo	$120,000
2010	Blaise Nkufo	Seattle Sounders FC	$480,000
2010	Mista	Toronto FC	$987,338
2010	Nery Castillo	Chicago Fire	$1,788,061
2010	Geovanni	San Jose Earthquakes	$n/a

Notes

• ‡ – indicates players who originally signed with MLS at a salary lower than a Designated Player level but later had their salary increased to a Designated Player level.
• † – indicates players who still continued to play in MLS but had their contracts negotiated below a Designated Player level.
• Player salaries include compensation from their MLS contract, not including any bonuses or compensation from contracts with individual teams or their affiliates.

Most Designated Players per country

• 5 Mexico: Cuauhtémoc Blanco, Omar Bravo, Nery Castillo, Luis Ángel Landín, and Rafael Márquez
• 3 Argentina: Marcelo Gallardo, Claudio López, and Guillermo Barros Schelotto
• 3 Brazil: Denílson, Luciano Emilio and Geovanni
• 2 Colombia: Juan Pablo Ángel and Fredy Montero
• 2 France: Eric Hassli and Thierry Henry
• 2 United States: Claudio Reyna and Landon Donovan
• 1 Canada: Julian de Guzmán
• 1 Costa Rica: Álvaro Saborío
• 1 England: David Beckham
• 1 Montenegro: Branko Bošković
• 1 Peru: André Mendoza
• 1 Spain: Mista
• 1 Sweden: Freddie Ljungberg
• 1 Switzerland: Blaise Nkufo
• 1 Uruguay: Álvaro Fernández

See also

• Allocation (MLS)

External links

• Designated Player Rule passed