clock menu more-arrow no yes mobile

Filed under:

Examining the Vagaries of Chivas USA's Salary Cap

Chelís started talking about money, so why shouldn't we?

JPA: Maybe doesn't like money talk, but it is part of MLS.
JPA: Maybe doesn't like money talk, but it is part of MLS.

With the 2013 preseason underway, the memories and disappointments of 2012 will begin to recede. It is still instructive to look back in some respects, however, as the information available for 2013 can be spotty at best. If you haven't figured out what I mean by this point, the main mystery is money.

At the SuperDraft last week, Chelís spoke of the necessity to cut $1 million from Chivas USA's payroll. Whether that's because Jorge Vergara just wants to save money, or Chelís wants the money freed up for players he wants, remains to be seen. Obviously, from a Chivas USA perspective, it is hopefully the latter. In part, that's because $1 million makes up about a third of the salary cap, which is reported to be a hair under $3 million. Obviously, if Vergara hopes to field a team that will be competitive, he can't skimp on the allotted salary cap by 33 percent.

Now, in looking at what Chivas USA has lost since last season, it is important to note that the four players who are definitely gone had rather substantial salaries (all figures courtesy of the October 2012 figures released by the MLS Players' Union):

Name 2012 Base Salary 2012 Guaranteed Compensation
Juan Pablo Angel $350,000 $600,000
Danny Califf $275,000 $275,000
Alejandro Moreno $185,000 $195,000
Peter Vagenas $70,000 $85,000
Total $880,000 $1,155,000

Additionally, two players who look pretty much gone, short of official confirmation of the club, also clear some money for 2013:

Name 2012 Base Salary 2012 Guaranteed Compensation
Ryan Smith $160,000 $205,666.67
John Valencia $50,000 $50,000
Total (Added to above total) $1,090,000 $1,410,666.67

On the surface, it looks like Chivas have cleared a little more than a third of that $3 million figure. Great!

There are some caveats to that. First, the salary cap does not correspond to either base salary or guaranteed compensation, as the league uses different figures than those released by the players' union. Basically, transfer fees, bonuses, and other miscellaneous compensation is also included in the salary cap numbers. The problem is that the league does not release a team's actual salary cap figure publicly ever.

Second, the use of allocation money muddies the waters further. Allocation money is what we hear about all the time in relation to trades that take place within MLS. Teams get allocation money each season, but it is incentivized, so that if a team qualifies for the CONCACAF Champions League, for example, they receive additional allocation money. What do they do with that money? They can trade it, of course, but they can also pay for player salaries beyond the salary cap.

You might wonder how many designated players Chivas USA had in 2012. It turns out they had two over the course of the season. Oswaldo Minda was not paid much in terms of salary, but he qualified as a DP because of his transfer fee, so his cap hit was more significant than $50,000 in base salary would indicate. The other DP was Shalrie Joseph, whose base salary was largest on the team by the end of the season.

What about JPA? Early last season, Chivas USA disclosed that he was not a DP, despite making more than $350,000. Although they never admitted this publicly, they spent some allocation money on paying JPA's salary, outside of the DP structure. That is completely within the "rules" of MLS salaries.

And not to make it more complicated, but players 21-30 of an MLS roster do not count against the salary cap. That includes Generation Adidas players, of which Chivas had none in 2012 (and will have none in 2013). Basically, the cheapest players are not included in the salary cap, as they are considered "developmental players." Last year, players who fit this category likely included Marky Delgado, Rauwshan McKenzie, Tim Melia, Marvin Iraheta, Patrick McLain, and Cesar Romero. Of that group, the term "developmental" makes considerable sense, as only McKenzie played significant minutes in 2012.

Players who remain with the team this year are nearly always due a raise. This is standard, and the salary cap increase is intended to keep pace with those raises year to year. Still, considering the amount of money cleared already, one would think that Chivas has something to work with. Of course, that is dependent on how much incoming players like Edgar Mejia, Mario de Luna, Giovani Casillas, and Antonio Rodriguez will be making this season. Players in Mexico nearly always make more than all but a few of the players in MLS, so the $1 million cleared by some departures could be swallowed by the new Guadalajara players. We won't know for sure until their salaries are disclosed by the Players' Union this spring.

We'll look into the salary situation more during the preseason, especially as we find out more about who is gone or may be leaving. In the meantime, hopefully this essay proves to be something of a primer on the vagaries of the MLS salary cap.

What do you think? Leave a comment below!