off the books salary the norm for foreign players?

[Jonny Bishop]

Scanning Goff's blog today, this jumped out at me,

Mina made $80,000 in MLS last season, but because he was on loan, his total earnings were probably doubled. It's not unusual for foreign players in MLS to have two sources of income -- one public, one private. Take Guillermo Barros Schelotto, for example. He was on the books in Columbus for $150,000, but my understanding is that he made $350K last year and will collect more than $500,000 this season.

Okay, I know MLS rules are written in sand, but jaded as I am I did a double take on this one. It seems to have some pretty hefty implications for the supposed "salary cap". And seriously, what's the point of the DP slot if you can have a guy making more than the league max while only charging him at $150,000 in a normal senior roster spot?

Can anyone shed more light on this? like who exactly is paying the rest of the salary, through what channels, and how much of this is going on? It would be interesting to re-compute payrolls based on this info.

Am I over-reacting? is hundreds of thousands of dollars (potentially millions) being traded under the table just not a big deal?

[drogbadives]

Didn't the Crew use allocations to pay for the part of Scheletto's salary not under the cap?

[jason1551]

Didn't the Crew use allocations to pay for the part of Scheletto's salary not under the cap?
Yes.

DC did something similar with Fred and Emilio last year (i.e. buy down a contract with an allocation). FCD did the same thing when Vanney came back to the league. It's actually a pretty common occurence for teams to use allocation money on an expensive player.

[jason1551]

Can anyone shed more light on this? like who exactly is paying the rest of the salary, through what channels, and how much of this is going on? It would be interesting to re-compute payrolls based on this info.

It'd be difficult for the simple reason that neither the teams nor the league disclose intimate details about contracts. You could get their salary, but you have no way of knowing how much is being paid for with allocation money (or is incentive based for that matter).
Am I over-reacting? ?Yes.

is hundreds of thousands of dollars (potentially millions) being traded under the table just not a big deal?
Only if you don't follow the basic acquisition rules in MLS. If you can follow them well enough, you can see that using an allocation on a player is generally a short-term solution to what can be a long-term problem (low cap hit now vs. high cap hit the following year).

And, yes, the allocation setup is screwy, but no team has become an all-star acquiring super power through it.

[Jonny Bishop]

Perhaps I'm wrong, but I don't believe Goff's reference to "two sources of income -- one public, one private" was referring to the buying down of contracts via allocations, especially since he indicated that this practice appeared to be limited to foriegn players.

Maybe this is just the allocation system poorly described, but I doubt it.

[3rd Degree]

he's also talking about personal sponsorship deals. Similar to Beckham's $500000000000000000 he makes from adidas. Some of which require more actual work that others.

[sidefootsitter]

From what I recall last season, Columbus's offer to Schelotto was $1.8M for 3 years (or $600K/per).

Some of it has been written off as allocation but they may have also paid him a sign-up/moving bonus that's not been entirely on books either.

The Chivas situation is even screwier since Vergara could pay his players from the other side of the border.

The outside sponsorships, as mentioned above, is another area entirely.

Some of them are fairly independent of the league itseld and some have commingling deals.

[POdinCowtown]

Schelotto is under contract through the end of this year. The Crew used a major allocation last year and will probably use another this year to bring his salary down below the league max.

Goff was referring to Mina who is under contract with another club and on loan to Dallas. Mina gets paid by both clubs.

[Timbers]

Goff was referring to Mina who is under contract with another club and on loan to Dallas. Mina gets paid by both clubs.

Perhaps the way it works is Dallas pays Mina's former team a loan fee (which doesn't count against the cap), and then Mina gets a share of the loan fee from this former team. That would be a way for Dallas to pay Mina "off the books".

I think Carlos Ruiz may have had a deal like that when he first played for LA from 2002-04. His salary with LA was listed at $75K (but I believe his former team in Guatamala still paid him a separate salary, probabably with money they got from LA).

I suppose arrangements like that could also be a way to avoid US income taxes.

[Going Mobile]

since day one there have been many players who have gotten paid with creative financing, houses cars etc...... not part of their salary but supplied by the teams/League. The only difference is more people are paying attention now and the players have a union

[rocker]

so does this happen as well with the development players?
if so, then people shouldn't complain about the low salaries.

and if something is occuring outside of the rules (not allocation), doesn't that harm the league's position in the next collective bargaining negotiations? This stuff must get around, even if just rumours, and the players will ask for it to be codified (in other words, take the total amount of the "side" payments and add that to the total amount of the salary cap).

at the very least, this has huge implications for how we debate and discuss the value of players. Ever since the MLS Players Union released the salary details, there have been debates on the 'net about a players "value". I know people were saying "wow, a guy like Schellotto only makes $150K! We should look to Argentina too for cheap talent like this!" but that's clearly a false assumption. Is South America as cheap as we think?

[RSwenson]

so does this happen as well with the development players?
if so, then people shouldn't complain about the low salaries.


To some extent (I have no idea how often)... but at least some live with "host families" much like exchange students... though I know that some wind up sharing a place with multiple room mates... I guess that this is dependent on the team and the situation...

[Marchetti]

To some extent (I have no idea how often)... but at least some live with "host families" much like exchange students... though I know that some wind up sharing a place with multiple room mates... I guess that this is dependent on the team and the situation...
Now, don't hold me to this... but I am almost certain that the Fire own an apartment or condo in the city that can easily house 4-6 people, with the sole intention of it being "rookie" housing for developmental players who otherwise can't even afford montly rent somewhere else.

[RichardUK]

Yeah, as far as I've been led to understand, most developmental players are housed by the club and won't be paying rent. They also do coaching or other part-time jobs, so are making minimum wage, but have very few out-goings. Sounds OK to me.

[Stan Collins]

Sorry to revive an old thread, but I've been mostly out of town and didn't have as much time to post. I think dodgy contract reporting is an issue--the Union very much wants the numbers they quote in their annual player salary list:
http://www.mlsplayers.org/salary_info.html

to be accurate (that reflects signing bonuses, btw, which are the bulk of the difference between the "salary" and "guarantee" columns). This is considered very important for player bargaining.

Also accounted for in that list is usually those for whom teams are using allocations to buy down their cap value (because the list is not a cap figure list, it's a compensation list).

So that makes the GBS figure of 150k, when all accounts have him making more, "interesting." And when I say "intreresting" I mean "suspicious."

Only thing is, there aren't many other players in that condition. I took a quick look through the figures (and others are welcome to follow suit) and didn't see too many examples of suspicious reporting. I do think that the contracts of Caludio Suarez and Markus Schopp were probably subsidized by the "home club," but in a way that's not any different from Carlos Ruiz's old loan deal, and it wouldn't apply in the case of GBS.

It will be very interesting to see what he's listed at when this year's list rolls around.