The Story of GAM Inflation
How MLS slowly raised the amount spent on a roster through two rule changes
I wanted to start this piece with a bit of fun trivia regarding MLS and its GAM distribution.
There is a perceived ‘bonus’ for missing the playoffs in MLS. The notion is, you get $250K for missing the postseason. That’s not exactly what the CBA says, and the allocation is actually a bit different. Let me explain.
MLS (depending on what they call the post-season) will create 250K times the number of teams that miss the playoffs. Let’s say in this instance, making the play-in game means you’re in the playoffs. That means 12 teams do not make the playoffs, which means the league, at a minimum, must create $3M of this end of season allocation.
Read carefully. MLS can split that money however it wants, whether a team missed or made the post-season. Just as long as the teams that the allocation is split to are equal to at least two fewer than the number of teams that make the postseason. So in our example, as long as MLS splits this amongst at least 10 teams, they can do whatever they want with the money.
This is just another reason why trying to estimate GAM is so hard. Like, seriously, just give teams that miss the playoffs $200K or something and call it a day. Why does it have to be this hard?
That isn’t the main topic I wanted to talk about, though. The main critique of MLS over the years (and rightfully so) has been the league’s slow but controlled growth in roster spend. Everyone always points to the budget rules as a way that the league is not capiltizing with the arrival of Lionel Messi. The league’s CBA has forced the league to take small steps in order to increase roster spend, but the effect they’ve had has been surprisingly strong.
Roster Construction Models
The first switch allowed for the change in roster construction models. In MLS, you can choose between having two Designated Players and four U22 initiative players, or three DPs and three U22s. The catch is, if you sacrifice the DP spot, you’d get the ability to inject up to $2M in dGAM (or discretionary GAM). Remember, this is discretionary; you do not have to use all $2M. Just like TAM, whatever amount you want to use is the amount you use.
In the CBAs, the third DP spot has always had a bit of an interesting twist. It’s almost like having a third DP was a luxury with a small penalty versus what the system was intended for. Teams actually have to pay $150K for the third spot (unless it’s a Young DP). The league can change it, but again, teams that don’t have a third DP at the very least will receive some sort of allocation money to spend. Essentially, the bare minimum for DPs is two, with a way to get a third.
MLS leveraged that with the roster construction models. The $2M you receive in dGAM is huge; yes, it’s only valid for the season that you acquire it in, but using that money first allows more allocation money to be opened up for further use. If I, for example, have $5M in GAM and $2M in dGAM, I can use the dGAM first and then figure out what I can acquire with the $5M leftover. If I don’t use it? Cool, that’s where the next new rule comes in.
Carrying over GAM
The ability to carry over GAM is what the roster construction models provide. When we saw Minnesota’s number last year, it was obvious that they’d have a lot to work with. When we saw that Miami was carrying over the most for a team that had the 3+3 roster construction model, we knew that an off-season like the one they’re having right now was possible!
If every bit of GAM were carried over from 2025, teams would be carrying over $40.8M in GAM. On average, that’s an extra $1.3M per team (even though we know the allocation isn’t even). That, by itself, injected money for teams to use. But also, that inflates GAM numbers. Now there’s more of this currency flowing in the system, making prices super expensive. The $300K Minnesota just paid for an international spot will be the new norm. Hell, it might even be higher; we’re not even near the peak demand of the international slot season.
Keep this in mind. In 2024, we received the first-ever GAM release. The total amount of GAM in the league ecosystem was at $112M. That total as of this date, without roster construction models or GAM generated from transfers?
Over $140M.
We’re seeing a jump of over $28M in allocation money. Last year’s price isn’t this year’s price, and teams have a hell of a lot of roster space to work with. If Minnesota United goes 2+4 and squeezes out every dollar in the other roster mechanisms, they could have around $20M to build their roster. Will they use that much? My hunch is no, as Minnesota has looked for talent in undervalued leagues, and I don’t think they’ll need to use all of it. However, they can do so, something that legitimately would’ve been impossible without the two rules listed above.
If we had to wipe GAM every year and didn’t have the injection of $2M in dGAM, the max roster spend this season would’ve been $11.8M. Even if we included the $3M conversion from a transfer, that would’ve only gone to $14.8M. According to my estimates, over half of the league can spend over that number now. It’s mainly driven by the roster construction model, but think about the GAM teams that are carrying over. We talked about Minnesota, but San Diego has $3.4M they can bring along in 2026. LAFC had $2M in potential rollover. 19/30 teams had over $1M in potential allocation money to carry over into this season.
I’m not saying that MLS shouldn’t loosen up its roster rules. There should be some changes to the system (which I’ll throw out some ideas in a future blog). However, MLS is trying, within the confines of what it can and cannot do. And again, we didn’t even mention the increase in the transfer revenue GAM, which went from $1.5M to $3M.
Another aspect to consider is that the going price for certain items may not be the same as you’re accustomed to. Expect international slots to go up. We’ve already seen six players traded for over $1M in guaranteed GAM (even if it’s across two seasons). At this point last year, we had just hit four, with the sale of Chicho Arango to San Jose. That’s even with the addition of the cashfer system, which has become the primary way to acquire players for a higher fee.
I usually end FAM on a lighter note, but I need to be honest, guys. My heart is heavy with my family’s country, Iran. I was born here, but both of my parents and my family were born and raised in Iran. It’s a horrible situation going on, with the people pushing for a change and the Islamic Regime massacring citizens for protesting. Please keep the country in your thoughts. Regardless of your political affiliation or your thoughts on US foreign policy, what they are doing to people is absolutely horrific.
Until next time.
Thoughts and prayers for your family, and all the innocent citizens of Iran.