Transfer revolution in MLS: What is the new 'cash-for-player' system?

Tom Weber

Updated: 4 Feb 2025 15:03 GMT
4 min read

Major League Soccer has implemented a new 'cash-for-player trade' system that will revolutionise intra-division transfers.

LA Galaxy star Dejan Joveljic became the first player to move via the new mechanism during the 2025 off-season, joining Sporting KC for $4 million (€3.9m) off the back of an MLS Cup-winning 2024.

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The deal has entered the annals of MLS history as the first-ever intra-league player 'trade' completed with cash as opposed to General Allocation Money (GAM) or Targeted Allocation Money (TAM).

The second cash-for-player deal came shortly after Joveljic's move as the Philadelphia Union sold Jack McGlynn to the Houston Dynamo. The 21-year-old US international became the first home homegrown player to transfer for cash.

The Union received a guaranteed $2.1m (€2m) and a 'conditional' $1.3m (€1.3m) as well as a sell-on percentage as part of the deal. So, what is this new transfer system and how does it work?

Compared

Dejan Joveljić

F (C)

Sporting

Dejan Joveljić

F (C)

Sporting

VS

Jack McGlynn

M (C)

Houston

Jack McGlynn

M (C)

Houston

€5.5M	ETV	€4.3M
€4.6M - €6.3M	ETV Range	€3.4M - €5.1M
25 years old (07 Aug, 1999)	Age	21 years old (07 Jul, 2003)
Serbia	Nationality	United States

What is MLS's 'cash-for-player trade' system?

In short, MLS's new 'cash-for-player trade' system is the same as the transfer approach in place in every other part of the world. MLS clubs can now put cold hard cash on the table and sign other MLS teams' players. That's it.

Previously, MLS clubs were restricted in their intra-league dealings by the finite amounts of GAM, TAM and other tradeable assets such as players, international roster spots and draft picks.

Now, wealthy club owners can sign MLS players for unlimited sums. However, there is still a restriction: clubs can only sign and sell two players per year for cash and 'no other forms of compensation may be included in the trade terms.'

Moreover, Designated Players (DPs) signed via cash have to remain DPs for the guaranteed duration of their contract. Their contracts can't be bought down to open up a DP or U22 Initiative Player slot. Cash received by clubs can be converted into GAM.

An official statement read: "MLS clubs may now use an unlimited amount of out-of-pocket funds (cash) to trade for players, allowing MLS clubs to acquire talent from within the league without having to use General Allocation Money (GAM) or other assets (such as SuperDraft selections or International Roster Spots).

"The update creates additional opportunities for top talent to remain within MLS, while creating another pathway for MLS clubs to generate significant revenue on player movements and further incentivizes player development."

© IMAGO - Superstars like Inter Miami's Lionel Messi can move to the highest bidder within MLS

Why would MLS clubs use cash instead of other assets?

During an appearance on CBS, MLS transfer insider Tom Bogert explained the motivation behind the regulation change: "This rule is implemented for the biggest players in the league," he said.

"Dejan Joveljic would not have been able to have stayed in MLS in any other time in the league's history because no team has $4m in GAM able to be traded.

"So Joveljic gets to stay in MLS, he gets a fair pay rise of what his market value is, of what he deserves, of what clubs in Mexico or elsewhere in the world would have offered," he continued.

"The LA Galaxy think that he's worth that, too. They just don't have the space in their salary cap and they didn't want to stand in his way to go get a payday with Sporting Kansas City - and it helps the Galaxy because their valuation was met with this trade."

Sporting KC outbid Mexican giants Tigres to secure Joveljic's services, which nicely illustrates that the rule was implemented to make MLS clubs more competitive in the market.