Orlando City Acquires $400,000 in Targeted Allocation Money from LA Galaxy

Orlando City has replenished its allocation money reserves today following a trade with the LA Galaxy. LA sent $300,000 in 2019 Targeted Allocation Money (TAM) and an additional $100,000 in 2020 TAM in exchange for the Lions’ No. 2 spot in the MLS Allocation Order. Orlando also received the Galaxy’s spot in the Allocation Order, dropping to the 11th (soon-to-be 10th) spot.

That trade opened the door for the Galaxy to send their newly acquired No. 2 ranking to Toronto, along with the club’s first-round MLS SuperDraft selection in 2020 to grab the top spot so they could sign 31-year-old defender Giancarlo Gonzalez from Serie A’s Bologna.

The Allocation Process is used to select U.S. National Team players, elite U.S. Youth National Team players or former MLS players who are returning to Major League Soccer from non-MLS clubs, after leaving the league for more than $500,000. (The complete Allocation List of eligible players can be found here.)

Center back Gonzalez left the Columbus Crew in 2014 following an impressive World Cup with Costa Rica. He signed with Italian side Palermo for a reported fee of $5 million and has therefore been subject to the Allocation Order.

Orlando City held the No. 3 spot coming into the off-season behind expansion side FC Cincinnati and last year’s bottom placed team, the San Jose Earthquakes, but moved up to No. 2 in December after Toronto FC, via trades with both San Jose and Cincinnati, looked to bring Laurent Ciman back into the league. Selecting the Belgian defender sent the Canadian side to the bottom of the pile but in January the Reds regained No. 1 spot as they traded defender Nick Hagglund to FC Cincinnati in exchange for pole position and $250,000 in combined allocation money. Toronto had held the top spot ever since before today’s trade.

What it Means for Orlando

While falling to the middle of the pack in the Allocation Order is less than ideal (depending on which players become available), the Lions needed the influx of cash badly. The team is in the midst of a rebuild and still has holes at some positions and lacks depth in others.

Having 2019 TAM will allow Orlando City some flexibility in the summer transfer window to make moves to further improve the squad. If James O’Connor can keep the team in playoff contention until the middle of the year, the TAM collected today from LA could help City bring in a quality player or players to help provide a boost in the race for the postseason. If City is well below the line, players can still be brought in to get them acclimated for a better run by the team next year.

TAM can be used to either sign a player who would make more than the league maximum without needing to use a Designated Player (DP) slot, or it can be traded to a team in the league to bring in other assets, whether players, draft selections, or international slots. It can also be used for buying down, on a prorated basis, a DP’s salary budget charge to or below the maximum salary budget charge, thereby allowing the club to use a DP slot on another player.

So there are several ways the Lions could use the money sent over by the Galaxy to help improve the team. It will bear watching to see how the 2019 TAM is used, as it must be applied (meaning the club must tell MLS how it is to be used but doesn’t actually have to officially use it) by four transfer windows after it is acquired. One of those windows is open until May 7. The next opens July 7 and runs to August 7.