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NWSL institutes new financial rules

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The “Sam Kerr” rule?

Updated to include that allocation money may be traded.

After a board meeting on Monday following the NWSL Championship in Cary, NC, the league’s owners have voted to institute new salary rules for the 2020 season, among other financial changes. These would appear to be responses to the league’s need to grow, as some teams have been pushing at the previous boundaries for at least a season or two now. Other teams will need to keep up with this growth or get left behind, which as the league grows more attractive to investors, is probably a good attitude to take.

Here are some of the new financial rules:

  • New 2020 salary cap maximum of $650,000 (increase from $421,500 in 2019) and new minimum salary of $20,000 (up from $16,538)
  • Multi-year contracts, up to three years
  • Contracts can no longer include “additional work” like performing at camps
  • No more cap on housing and auto expenses, and housing must be provided for supplemental roster players as well
  • Teams may now pay transfer fees for players outside of NWSL and may sell rights to players to teams outside NWSL (this does not apply to US allocated players)
  • Teams may have up to three players on their discovery list during the season and up to seven players on their list between the day after the championship and the day before the first game of the next regular season (essentially the offseason)

Perhaps the biggest move here is the introduction of allocation money, which is a way for teams to now spend beyond their salary cap. Vivianne Miedema doesn’t want to play for $50,000/year? Well guess what - now a team has the option to offer up to $300,000. Here’s some of the details of allocation money:

  • Teams may purchase up to $300,000 in allocation money from the league to be used on player salaries outside of the salary cap and in excess of the $50,000 maximum salary
  • Allocation money cannot be used for US or Canadian allocated players
  • Allocation money can only be used on certain targets, including those in the NWSL Best or Second XI for the two most recent seasons, international players with more than three caps for their NT in the past 24 months, NWSL MVP/Golden Boot/Rookie of the Year/Defender of the Year in the past two years, domestic players with at least five seasons in NWSL, former US or Canada allocated players, players previously on an allocation money contract

Allocation money is tradeable between teams, so congratulations to someone on their half-million deal?

You can see from the list of players eligible for allocation money, this rule is doing its best to keep in NWSL high value players with options to shop around in other countries - for example, Sam Kerr. It’s also a way to keep your older core players in the team who are starting to think about retiring to get better-paying jobs or start families. Maybe after five seasons in NWSL $50k doesn’t seem great, but if your team can offer you $75-100k, that’s much better incentive. So for the teams able to buy the max, their salary cap is in effect just shy of $1M, which is not terrible for year 8, and considering where the league started.

You can read the full list of changes on the NWSL website, which includes details like requiring cars to be available to players for the entire season, configurations for multi-year contract options, and how teams will pay transfer fees.

With new investors coming onboard through expansion and the league finally starting to look like it’ll be able to capture big national sponsors (hi Budweiser!), these financial changes are a signal that the league’s valuation is changing. Prospective investors need to see this league as a moneymaking endeavor that will take commitment and business best practices, not a side project because their daughters love soccer. This feels like we’re finally shifting into NWSL 2.0, when the league takes on its next phase of growth, and that’s cause for optimism.