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MLS Designated Player Contracts: The history behind them, leading up to Messi’s arrival 📃

July 17, 2023

MLS Designated Player Contracts: The history behind them, leading up to Messi’s arrival 📃

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These unique contracts allow teams to sign high-profile players that they wouldn’t normally be able to afford. 💰

David Beckham was the first to be considered a designated player, and the rule has since been named after him. 👌

Keep reading to learn more about designated contracts and how they have been instrumental in the growth of Major League Soccer! 👇

Anyone who at least somewhat pays attention to world football knows that the MLS is a very unique league. Aside from the fact that it is nowhere near the most popular sporting organization in the country (falling way behind the likes of the NBA, MLB and NFL), the general structure of the MLS is very much different to what we’re used to seeing in Europe.

For starters, the league itself is primarily in charge of most of the financial aspects of player transfers: they handle contracts, and they also oversee the salary limits for each team. This leaves the clubs with the responsibility of actually going after the players that they want as well as budgeting accordingly with the money that is ultimately very limited because of strict rules.

Follow along with us as we take a look at what these rules are and how they’ve made an impact.

A quick history lesson…

To understand the way MLS works now, it’s important to look back at the history of soccer league play in the United States, which explains why things are the way they are now.

Before the MLS, there was a league called the NASL. You might be wondering, “didn’t the NASL come after”? You’re absolutely right, the NASL is a league that ran from 2009 to 2017, typically seen as having played second-fiddle to Major League Soccer.

The thing is, we’re referring to an entirely different league. Once upon a time, there was a North American Soccer League which ran from 1967 to 1985. The one that existed most recently shares the same name as the original, but there is no direct connection.

Many soccer greats of the 20th century joined clubs in the NASL, which quickly created newfound interest for the beautiful game. You may recognize the likes of Beckenbauer, Cruyff, Gerd Muller and Carlos Alberto, who all briefly called the US home in the latter end of their careers.

The name that stuck out far beyond the others, though, was the late Pele. If you know your footy history, you know that the Brazilian legend came to the States in 1975 to play out the last 2 years of his career with the New York Cosmos. His arrival would forever remain a key moment in the original explosion of soccer in this country.

Only a decade on from the arrival of the 3-time World Cup winner, the NASL would cease to exist. So what exactly happened?

Although many factors are attributed to the untimely demise of the league, one of the biggest reasons was the lack of salary cap and proper transfer systems. Clubs in the league could sign whoever they wanted and pay whoever they wanted however much they wanted, as long as they had the funds to begin with. As a result, the teams that stuck out as being richer than the rest saw way more success.

There was one team that fit this example for the last years of the original NASL. We mentioned them already: the NY Cosmos. Because of their fortunes, they could sign so many top players. Besides having had Pele for 2 years, Beckenbauer and Carlos Alberto also hopped on board later on.

With their star-studded roster, the Cosmos would win the NASL trophy a record 5 times in its 17-season lifespan. Four of those wins came in the final 8 years.

As expected, fans grew tired of the same team winning over and over, with the only reason being that they had more money, not to mention their convenient placement in arguably the most famous city in the world. 

Fun fact: the legendary song by Frank Sinatra, dedicated to the Big Apple was released in the summer of 1977. The Cosmos, with Pele in their ranks, would go on to win their 2nd NASL trophy. Coincidence? We think not.

Among other reasons, public loss of interest had a hand in causing multiple NASL teams to dissolve, which eventually led to the NASL disappearing as a whole.

Early MLS success

After the NASL fell apart, the country was left without a high-level soccer league. The creation of the MLS in 1993 came with the mission to solve this problem. They went about doing this by creating an event playing field for all competing clubs.

Some of the original financial rules set in stone were as follows:

Salary cap: $1,200,000

Max player earnings: $192,500

Although two teams stand out as being holders of more MLS titles than the rest of the league - DC United with 4 and LA Galaxy with a record 5 - in the league’s first decade of life, 6 different clubs got their hands on the trophy.

Flash forward to present day, and this type of league diversity has only improved thanks to further amendments to salary restrictions, as well as brand new rules.

Bend (the rules) like Beckham

American soccer as we know it would change for good upon the arrival of the then 32-year-old English great - David Beckham.

A player of his caliber was literally impossible to sign for any team in the MLS because of his high-value and salary requirements that only top European clubs could match. Upon Beckham entering into negotiations with the LA Galaxy, the league went to work to come up with a rule to make the transfer happen.

The Designated Player Rule - or the Beckham Rule for historic purposes - was put into effect ahead of the 2007 season, and none other than the Man United legend became the first player to be signed under this designation.

The rule is simple to understand: players that would normally be too expensive to purchase and have in any given MLS team’s ranks - whether it’s because of their world class status or inarguable talent - could now be signed at a cost that far exceeded that $1.2 million salary cap.

All teams were awarded 1 DP spot, which could be traded, but nobody was allowed more than 2.

Today, all teams have 3 available DP spots, along with other ways to acquire talents that require a larger salary. Allocation money was introduced into the league as well, which offers the ability for big names to be signed without taking up these valuable slots.

Gareth Bale and Giorgio Chiellini are two examples of players that were bought using these allocated funds.

Beckham’s LA Galaxy annual salary was a whopping $6.5 million, more than 3 times the original limit. What’s more is that the club only had to pay a fraction of this cost; $400,000. The rest of the midfielder’s contract, totaling to about $6.1 million, was paid off by the team owners.

From this point on, the MLS would never look back.

Why designated player contracts work

If having this sort of rule in place would allow all MLS teams the opportunity to secure some of the biggest names in world football to play for them, which in turn would increase revenue, views and the overall popularity of the league over time, then it makes sense why it was without a doubt a no-brainer decision.

Designated contracts allowed the MLS to attract star-studded talent without actually compromising the landscape of the league that makes it so any team, star player in their ranks or not, could still compete.

Perhaps one of the downsides (if you can even call it a downside) of the MLS working this way is that no team can necessarily create a sort of winning dynasty. Think of the Golden State Warriors in the NBA, for example. We also talked earlier about the New York Cosmos of the 70s/80s.

The only MLS team that has had some sort of dominance over the league at one point has been the LA Galaxy, which has won a record five times. 3 of those successes came in 4 years.

Today, the Galaxy are second-to-last in the Western Conference.

Atlanta United, who began play as an expansion team in 2017, managed to win the cup in only their second active season.

No team being able to truly dominate also means that they can’t continue to get better and better overall, holding them back from even greater success, like winning the CONCACAF Champions League.

To date, the only MLS to win the tournament are the Seattle Sounders, who secured the title in 2022.

It’s really up for grabs for anybody within the league, and like we are seeing with the Galaxy today, fall from grace can happen in a blink of an eye, despite their designated players being Riqui Puig, Chicharito and Douglas Costa.

The bigger picture is that bringing in these players gradually helps grow the soccer scene in the United States. It’s not really about whether they flop or not. 

The real goal here is not the one that happens on the pitch, but the one that happens off of it.

First Beckham, now Messi: the future is bright!

It’s almost as if life came full circle for Beckham when Messi announced his decision to join Inter Miami CF in early June. From being the first big name to join the MLS back in 2007 and literally forcing them to establish a new rule, to now owning his own club in the league and now signing the greatest player in the world under said rule that is named after him.

If you were to have told Beckham in 2006 that all this was going to happen in less than 2 decades time, he may have called you crazy. Sometimes, that’s just how life goes, though. Now all we can do is sit back and witness magic in a league that many would have preferred the Argentine to not go to, but he’s here.

The bottom line is that there has been steady growth of soccer in the US for the past two decades, and it once again reached a new milestone in 2023, perhaps the greatest one of all.

Inter Miami co-owner Jorge Mas said it best at last night’s “La PresentaSIon” at DRV PNK Stadium in Ft. Lauderdale:

“There will always be a before and after Lionel Messi.”

He’s not just talking about the club, he’s talking about the entire country.

We hope you’re just as excited as we are for what’s to come for the beautiful game in the United States.

That’s it for the 7th edition of our newsletter! 😅
How did you like it? Let me know by messaging me via email at or by sending us a text. 📲
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Julian Febres

Content Manager

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