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MLS Announces Rule Changes for 2023

The allocation order is officially gone

Philadelphia Union v Los Angeles Football Club: - 2022 MLS Cup Final
LOS ANGELES, CA - NOVEMBER 05: Commissioner of Major League Soccer Don Garber reacts during the match between Philadelphia Union and Los Angeles FC as part of the MLS Cup Final 2022 at Banc of California Stadium on November 5, 2022 in Los Angeles, California.
Photo by Omar Vega/Getty Images

Major League Soccer announced updates to the league’s rules and regulations on Friday, bringing in five new changes to the way teams are allowed to construct their rosters.

Allocation Order Eliminated

Most long-suffering MLS roster nerds were probably already aware that the league eschewed the Allocation Ranking List and Order for this year, but Friday’s announcement formalized the change.

The Allocation Order was previously a mechanism designed to limit one club from signing a host of marquee American players, like U.S. Men’s National Team regulars or certain high-profile players that were sold outside the league. MLS previously published an Allocation Ranking List (ARL) of these players, and teams at the top of the Allocation Ranking Order (ARO) had first priority to acquire one of those players. The ARO was set in reverse order of the standings at the end of the season, and those any team that acquired players on the ARL dropped to the bottom of the order. FC Cincinnati notably took advantage of their position at the top of the order during the early 2020s, and the Ohio club was able to consistently eke value out of that spot through a series of successive inter-league trades.

Players who previously appeared on the ARL are now “discoverable” through MLS’s regular Discovery Process. According to the league, future transfers will become discoverable one week from the date when their International Transfer Certificate (ITC) is permanently transferred outside the league. Expansion club St. Louis CITY SC, who were set to receive the top spot of the ARO this year, were provided the opportunity to retain the right of first refusal over one former ARL player of their choosing. Tom Bogert of reported that the expansion side picked St. Louis native Josh Sargent, who currently plays with Norwich City in the English Championship.

Intraleague Loans Expansion

According to the league release, each MLS club will be able to loan out two players to other MLS clubs each season. The league’s previous ruleset only allowed clubs to loan one player within MLS per year. The league also confirmed that players on intraleague loans will remain eligible to compete against their former club.

Player Buyout Expansion

Off-season buyouts have long been a feature of MLS’s roster rules, but the league expanded their buyout policy for the 2023 season to incorporate in-season buyouts. The league now permits clubs to buy out one Guaranteed Contract during the season, which allows teams to receive roster and salary relief for the corresponding player’s salary budget charge.

The league’s release clarifies that in-season buyouts must be concluded before the close of the Secondary Transfer Window (August 2, 2023 this season). The league also confirmed that a given team’s one buyout is in addition to their ability to replace players under the Season-Ending Injury Replacement rule, which also saw updates this year.

Season-Ending Injury Replacement Player Changes

Clubs can now replace injured players on their Season-Ending Injury List and receive salary budget relief under some new parameters. The main stipulation—that teams must pay the injured player’s salary out of their own pocket before getting cap relief—remains the same.

The notable changes to the rule involve when teams can utilize this process and how much money replacement players can earn. First, injured players “must be formerly placed on the Season-Ending Injury List (SEIL) prior to the opening of the Secondary Transfer Window.” The league previously only allowed teams to get cap relief for players put on the SEIL prior to the close of the Primary Transfer Window.

Additionally, MLS is now allowing teams to replace Designated Players on the SEIL with another Designated Player, “provided that his Salary Budget Charge is not more than the player he is replacing.” The rule limiting only one such replacement player per season remains the same.

Transfer Revenue Share Updates

The final change announced by the league on Friday involves the portion of transfer revenue split between clubs and MLS. Teams can now receive 95% of the transfer or loan fee revenue from transactions, including those involving Homegrown or U-22 Initiative players. The previous rule involving Homegrown Players allowed clubs to receive 100% of the transfer revenue, while the revenue retained from transfers of U-22 Initiative players depended on the amount spent by clubs to initially acquire the player in question.

For external transfers of Designated Players, the league confirmed that clubs will receive all amounts “of the transfer or loan fee revenue after it has recouped all out-of-pocket cash payments made by the club in connection to that player.”