MLS introduces “Targeted Allocation Money” on July 8, will help teams sign higher-end talent

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Major League Soccer has your latest addition to its lexicon, and joining Designated Player, Homegrown Player and allocation money is…

(Drumroll please)

… Targeted Allocation Money. Tell them what they’ve won.

[ MORE: Preki named odds-on favorite for Leicester job ]

Targeted Allocation Money, or TAM, allows teams $100,000 per year for the next five years to use on players outside of the salary cap. How can TAM be used?

Beginning July 8 with the new transfer window:

1) It can only be used on players making more more than the maximum salary budget charge of $436,250.

2) It can be used to “buy down” a Designated Player’s salary, but only if the club is adding another Designated Player.

3) It can be traded to other teams for assets.

4) The club does not have to spend the full $100,000 each season, but must use the remaining money by the end of the next season.

5) A club can use all of its $500,000 this season on up to three players.

Make sense? We tried.

This does sound like the sort of mechanism that will help a team add a Giovani dos Santos, for example. Los Angeles can eat up a good deal of Omar Gonzalez’s $1.25 million salary, and it’s on a prorated basis according to Alexi Lalas:

It also calls into question how it helps teams with Designated Players who make less than the maximum salary budget charge (Matias Laba makes $300,000 and is a DP; Osvaldo Alonso makes $400,00 and is a DP).

It’ll get easier to understand… in time.