A key roster rule change in MLS is in the works and is expected to go into effect this summer, with the league planning to decouple designated player (DP) spots and U-22 initiative slots, sources briefed on the talks tell The Athletic.
Currently for an MLS club to use all three U-22 initiative slots, they cannot have three senior, over-max-budget DPs. In that instance, clubs can use only one U-22 initiative slot. Under the expected change, clubs will have access to all three U-22 initiative slots, no matter how they strategize their DP spots.
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The change is significant because these two mechanisms are currently the two biggest avenues for discretionary investment by MLS teams.
Sources say this change (and other discussed changes that could come this summer as well) are not replacing bigger, more sizable discussions to continue overhauling the roster rules this winter. It has not yet been officially passed by MLS owners, but is expected to.
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Senior DPs currently hit a team’s salary budget at a fixed charge of $683,750 (the maximum senior budget charge), regardless of their actual salary or transfer fee. Young DPs (23 or younger) hit the cap at no more than $200,000.
For instance, former MLS MVP Hany Mukhtar hits the cap at $683,750 this year, despite a guaranteed compensation of $3.2 million last year (per the MLSPA, pending a new contract this season as well) and an initial transfer fee around $3 million to sign him.
The U-22 initiative allows MLS clubs to sign players 22 and younger who hit the cap at a fixed, low cost as well and, crucially, not having to factor in the transfer fee to the budget charge.
Inter Miami, as an example, has invested heavily in their U-22 initiative slots, with deals to sign Tomas Aviles ($7 million fee plus add-ons), Facundo Farias ($5.5 million) and Diego Gomez ($3 million) last summer. Farias got injured this winter and was replaced on this year’s roster with Federico Redondo ($8 million).
That’s more than $23 million in transfer fee investment for one club, none of which counts against MLS’s soft cap thanks to the U-22 initiative.
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The change could have massive implications for ambitious spending clubs. While only four of 29 teams are using all three DP spots in a way that allows for just one U-22 player — Nashville SC, New England Revolution, Orlando City and FC Cincinnati — it essentially opens another spot for heavy investment for other teams as well.
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Miami, for instance, knew it couldn’t add another senior DP this winter because it needed to preserve all three U-22 slots. Now, the club’s third DP (behind Lionel Messi and Sergio Busquets) isn’t a concern. The Chicago Fire, which spent $12 million to sign Hugo Cuypers this winter, has another DP spot open. If this rule change takes effect, they have no restrictions on how they use that open DP spot. If they signed another DP this winter, it would have had to be a young DP, limiting their pool.
Austin FC needed their third DP to be Alex Ring, because his contract is under the max-TAM threshold. Under the proposed change, they could sign another senior DP if they wanted.
This potential rule change was discussed in league and ownership circles this winter, but ultimately was not voted on by the MLS Board of Governors at their meetings in December. Some owners on the newly-renamed sporting and competition committee continued to push for this change midseason rather than waiting for the 2025 campaign.
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