MLS 101: What is the Young Designated Player rule?

Why Matias Laba is classified as a "Young Designated Player"

Matias Laba with TFC

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USA Today Sports Images

PORTLAND, OREGON What is the Young Designated Player rule?

The term has been thrown around in these parts over the last few days after Vancouver Whitecaps FC acquired Young Designated Player Matias Laba from Toronto FC, but what exactly does it mean?

First, here’s some background on the Designated Player rule itself.

Major League Soccer instituted the "David Beckham" rule in 2007 as an attempt to compete for star players in the international soccer market. How does it do that?

Like many professional sports leagues in North America, MLS has a salary budget system that limits the amount of money clubs are able to spend towards salaries on a yearly basis.

The 2013 MLS salary budget was set at $2,950,000 per team and the maximum salary budget charge for a single player is $368,750. Note: since 2011, the annual salary budget and maximum budget charge has increased around 5 per cent each year.

Here’s where the Designated Player rule comes into play.

Teams can pay a Designated Player as much as they want and only the maximum budget charge (in 2013, $368,750) will count against the salary budget, which allows them to acquire star players without handcuffing the rest of their squad.

“Any money a club spends on acquiring a player or gives to the player as compensation is counted as a salary budget charge up to the max hit,” said Greg Anderson, Whitecaps FC’s director of professional teams. “That’s why if a club pay a significant transfer fee on a player coming from another market, they automatically become a Designated Player or Young Designated Player in the case of Laba when he joined the league last season.”

With Young Designated Players, which is simply a Designated Player under the age of 24, that salary cap hit decreases depending on their age.

A Designated Player 20 years old or younger counts $150,000 against the cap, while a Designated Player between the age of 21 and 23 counts $200,000 against the budget.

“If younger players were to be charged as full Designated Players, teams would be less likely to make that kind of an investment because obviously the younger the player, the less certainty that the player is going to be the real deal,” Anderson said.

“It’s kind of similar to the off-budget players (formerly known as the supplemental roster) from a salary budget perspective, where it gives you some leniency and time to develop young players by putting them on your off-budget roster spots so they don’t count against the cap.”

Every team is given two Designated Player slots with an option to purchase a third one for a one-time fee of $150,000. However, as another incentive to attract young talent, teams do not have to pay for the third slot to accommodate Young Designated Players.

For example, Whitecaps FC currently have two Designated Players in Laba and Kenny Miller. But since Laba, 22, is classified as a Young Designated Player, they could acquire another one without paying an additional fee.

At this point, Anderson said “it’s too early to tell” whether the Young Designated Player rule will serve its long-term goal of attracting the top young talent to MLS – the rule was instituted in 2012.

However, he added that Laba is a “great example” of the type of player it can bring into the league.

Whitecaps FC begin their 2014 MLS season on March 8 versus New York Red Bulls at BC Place. Season tickets start at just $349 and single-match tickets start at $22, subject to applicable fees. The 'Caps also offer a flexible range of ticket products, including half-season tickets ($244), 5-packs ($149), student season tickets ($199), and a youth soccer half-season ticket ($100). For more information on all Whitecaps FC ticket options, call 604.669.9283 ext. 2 or visit whitecapsfc.com/tickets.