Allocation money
In Major League Soccer, an allocation represents an amount of money teams can use to sign players and/or allocate to their salaries to get under the salary cap. Allocations are given to teams that have missed the playoffs the previous seasons, given to expansion teams, or awarded as compensation for players lost. This can be when a player is sold to a foreign club (Brian McBride), left on a free transfer (Clint Mathis), or retired (Cobi Jones). Allocations can be split and/or traded.
Whether the allocation is given, and its size is determined by MLS; the details are not disclosed to the general public. Citing this, some in the MLS community have accused the league of favoring major market teams, particularly the Los Angeles Galaxy, in the use of allocations.
Allocation money is not to be confused with the MLS Allocation Order, which is a ranking used to determine which MLS club has first priority to acquire a U.S. National Team player who signs with MLS after playing abroad, or a former MLS player who returns to the league after having gone to a club abroad for a transfer fee. Along with Allocation Money, Allocation Order rankings can be traded, provided that part of the compensation received in return is another club’s Allocation ranking.
Twice in league history, an allocation received for a lost player was used on same player upon his return to the league: by the Chicago Fire on Ante Razov and by the New England Revolution on Daniel Hernandez.
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