What to do with Omar in 2016?

http://www.lagalaxy.com/post/2015/1...ent-players-through-targeted-allocation-money

League has announced more TAM will be available in the sum of 800k for each of 2016 and 2017. We still need to obtain about 200k more TAM to buy down Omar's contract (or acquire the full 1 mil of general allocation money, as TAM and general allocation money can't be combined).

Keeping Omar now is much easier and thus more reasonable, even with his drop in form. I think the club may still offload one of Gyasi or Omar, but based on the recent roster moves it seems more likely that Omar will be here next year than Gyasi.

 

According to Wahl and others we used absolutely all of our 500k allotment, but you might be right about having traded for some more recently-- I can't remember though.

 

The league has a max salary for any individual player of about 450k, but you're allowed three players (designated players) above that amount. LA had three, including Omar, who is still under contract for about 1.5 mil/yr.

Allocation money is "money" that, for various reasons, is granted to teams, and can be used to "buy down" players' salaries so that the official "budget charge" of the salary is lower. I've described it as Monopoly money that really just loosens the salary rules a bit for whomever you choose.

"Targeted" allocation money was created this last summer, and can only be used for one purpose-- to buy down a designated player's salary, to that of the max budget charge (450k) or lower, for the purpose of adding another player to the roster as another designated player at or above the first player's full DP salary (basically taking that first player's DP spot).

The league gave out 500k to every team last summer, which was supposed to last for five years. We used all of it to buy down Omar's contract, prorated for the second half of the year, to be able to sign Gio as another DP.

So, unless we disposed of another DP, we needed more TAM to keep Omar at his salary this coming year-- for the full year, we needed about 1 mil. The league just gave out 800k for next year.

 

Yeah 200k is just my approximate best guess as to the extra we need this year. It might be less, to the point that it's actually zero. If you go strictly by his 1.45 mil salary and the new max budget charge of 457k, and the fact that by all reports 500k was required for half of last year when the max budget charge was only a bit less, then it's about 200k, but yeah, who knows exactly how it'll be figured, and whether his salary can be accounted differently this coming year.

For one thing you have to assume MLS didn't just come up with that 800k figure out of nowhere-- Omar is the highest profile player affected by the rule last year, and he's a USMNT player, so obviously the league is very interested in the exact situation required for Omar to stay. [Also, I think there's a chance LA had told the league they couldn't find a suitable buyer for Omar]. So it's very possible that either by cooking the books 800k is exactly all that is needed for 2016, or the league knows that the Galaxy already have the extra 200k/whatever necessary. Per all reports though, any extra TAM they do have wouldn't be left over from last year but rather would have had to be obtained some other way.

 

I always assumed they prorated it from a slightly different point from exactly halfway. Gio officially signed (or was announced at least) on July 15, and if you prorate both:

Max budget charge for 24 remaining weeks: 201,346
Omar's salary for 24 remaining weeks: 669,231
Difference: 467,885

Given that all reports are that LA used all 500,000, I assume the date used was maybe only a few days before July 15. What do you think? To get the numbers above I just used 24/52 weeks to prorate the remaining amounts for 2015. Probably off by a small fraction but it works out very close.

Yeah I saw his no trade clause mentioned a while back. I'm sure he doesn't want to leave, especially if he wouldn't be a locked in starter at a "bigger" club.

 

Well that goes back to my initial (unpopular) point, which is that in his form for all of 2015 he probably isn't worth 1.45 mil even without all the TAM gymnastics the club has to do (or had to do, before the new announcement).

No idea what's in his head, but maybe he would be willing to take a pay cut if he thought he had a good chance at cracking the starting XI of an English club (probably Championship). He doesn't seem to have that kind of mentality to me, though. Just for (very rough) comparison's sake, at current exchange rates Yedlin makes about $570k/yr at Tottenham, and he's had just a sniff of playtime with Spurs and is currently out on loan (and playing poorly) with Sunderland.

 

@blech you are absolutely right!

I initially calculated that because Omar's salary is 1.45 mil, basically 1 mil above the max budget charge, that the club needs, in addition to the 800k from the league, an additional 200k of TAM.

HOWEVER, it appears there's a wrinkle in the rule that is quite easily overlooked.

From LA Times:
Bruce Arena said the team also negotiating a contract with veteran forward Alan Gordon and is hopeful of closing a salary gap that would allow it to keep defender Omar Gonzalez

This was also mentioned in a Goal.com article -- that Omar actually needs to take a salary cut from 1.45 mil down to 1 mil.
The rules state (from the official league TAM announcement):

A Player must earn more than $457,500 per year (2016 maximum budget charge) to qualify for Targeted Allocation Money. The compensation ceiling for such players is set at $1,000,000 per year, unless amounts are applied midseason

So unless we're only using a prorated salary for half the season (like last season), the player' salary for the full year apparently can't be more than 1 mil.

Thus it's beyond the point of us needing 200k more TAM. At his salary, we can't use any TAM at all on him this year. Thus the club/league needs to renegotiate with Omar and find some way to get his official salary down to 1 mil.

Which means

1. He's forced to take a deserved pay cut if he wants to stay. Then if he stays we only need to use about 550 of the 800k of TAM this year. According to the rules, we could use the excess to sign Gyasi to a, say, 700k contract and pay him down to a non DP level (I'm not necessarily advocating this, but I could see it happening). Of course we would probably then have to dump some more players, unless his homegrown status would still exempt him from the cap (I don't think it would, but not sure). With Steve Clarke out at Reading that option of selling Gyasi there at least seems to be closed.

2. There's a good chance he doesn't accept that and is sold/traded. Regarding no-trade clauses, the way it works everywhere else in the world is that everyone basically has a no-trade/sell clause because a transfer can't be completed without the player coming to terms with the new team. With regard to another MLS team, because the league as a single entity says he can't stay at LA with that salary (unless another DP is dumped), he just would have to decide that he wants his full DP salary, not eligible to be paid down by TAM-- so basically a team with a vacant DP spot. If he wants to stay at LA bad enough, then he takes the pay cut. With regard to a foreign club, he just would have to decide if he can't stay at LA then he wants to test himself abroad (if any buyers can be found).

IMPORTANTLY though, the LA Times article, unlike the goal.com piece, seems to claim that the problem isn't the 1 mil restriction, but rather what I initially pointed out-- the extra 200k TAM needed. The LA times article implies that LA does not have any extra TAM above the 800k, and need Omar just to take a 200k pay cut.

I'm currently inclined to believe the official rule of the 1 mil salary ceiling and the 450k pay cut requirement, rather than believe that the club/league finds it significant to haggle 200k with Omar.

If it's true, overall I think this restriction to 1 mil is actually great for the club as it basically forces Omar into a renegotiation for a more suitable salary, and allows the club more options with the TAM allotment.

 

Why I think it's more likely a 450k pay cut that's required rather than the 200k ( in addition of course to the text of the official rule stating the 1 mil ceiling)--

Bruce Arena in the LA times article :
"We're going to do a new contract with him. That's what our goal is. If we can't do it, then we can't work it out."

I doubt the club and/or Omar would find 200k a significant enough hurdle to talk about it like this.

Anyway, like I said, when it comes to Omar, at this point I'm quite content for 2016 no matter what happens, whether Omar takes a 200k cut and we use all the free TAM, or even better he's required to take a 450k cut and we have TAM left over, or he is sold/traded. Thus I'm tapping out from this thread once again.

 

One last thing- for convenience, here's the text of the rules from the new TAM announcement. The aforementioned 1 mil salary ceiling is in the last bullet point. I'm not entirely certain whether the scenario of keeping Omar and then signing Gyasi to a 700k salary bought down with leftover TAM to 450k is allowed, but I think it would be:

• Clubs may use a portion of or all of the available Targeted Allocation Money to convert a Designated Player to a non-Designated Player by buying down his salary budget charge to at or below the maximum salary budget charge. If converted during the Secondary Transfer Window, the Designated Player may earn at maximum $1.5 million on a prorated basis. If Targeted Allocation Money is used to free up a Designated Player slot, the club must simultaneously sign a new Designated Player at an investment equal to or greater than the player he is replacing.
• Clubs retain the flexibility to convert players bought down with Targeted Allocation Money into Designated Players if they have a free Designated Player slot.
• Targeted Allocation Money and general Allocation Money may not be used in combination when signing or re-signing a player, or when buying down the budget charge of a Designated Player. Either Targeted Allocation Money or general Allocation Money may be used on a player in a single season, not both.
• A Player must earn more than $457,500 per year (2016 maximum budget charge) to qualify for Targeted Allocation Money. The compensation ceiling for such players is set at $1,000,000 per year, unless amounts are applied midseason an existing Designated Player adjustment to Targeted Allocation. The minimum budget charge for a player compensated with Targeted Allocation Money is $150,000.