Designated player rule in MLS
Two years ago, I wrote a series of blog posts in Korean about the designated player rule in MLS. Back then, I had fresh memories of what I had learned from Professor Bank’s class called “The Beautiful Game”.
Recently, these posts gained a lot of attention in Korea after the Korean super star Heung-min Son signed with LAFC. You can go check it out here.
For those of you who cannot read Korean, this is the gist of what I wrote in 2023. According to MLS Roster Rules & Regulations, it looks like the core structure remains the same though key figures are a bit higher compared to 2023.
How did Inter Miami, which was under the salary cap of $9.8M, afford to sign Lionel Messi who had just been offered $500M from a Saudi club?
There are 3 elements in the salary cap of an MLS club: salary budget ($5.2M at the time of writing), general allocation money ($1.9M) and targeted allocation money ($2.7M).
MLS has a special exception to the salary budget. It’s called the designated player rule, which is also known as the ‘Beckham Rule’. MLS clubs can sign up to 3 designated players whose salaries only count partially against the salary budget.
MLS clubs can utilize the designated player rule in two ways. First, they can sign high profile players such as Lionel Messi, Xherdan Shaqiri, Javier “Chicharito” Hernández who will only carry a salary budget charge of maximum player salary ($743 in 2025).
Second, if they sign players at the age of 23 or younger as a designated player, only a small amount — $150K if the player is at the age of 20 or younger, and $200 if the player is at the age between 21 and 23 — will count toward the salary budget even if their actual salary is higher than that amount. A good example was In-beom Hwang, a Korean star midfielder who now plays for Feyenoord. When Vancouver Whitecaps signed Hwang when he was 23, they designated him as a ‘young designated player’ and were able to save room for the rest of the squad.
The Designated Player rule in MLS seems to be working quite well. After Lionel Messi arrived in Miami, his former Barcelona teammates Luis Suárez, Sergio Busquets, and Jordi Alba soon followed. As a result, the valuation of Inter Miami nearly doubled and surpassed $1 billion in 2024, placing them 16th on Forbes’ list. The two Los Angeles teams, LAFC and LA Galaxy, are also ranked in the top 20. Before 2023, no MLS team had ever made the top 20.
Next time, I’ll dive into the K-League’s rules and discuss how they could attract international players to come to Korea.
