After a week of rumor and speculation, Toronto FC officially announced on February 14th, the signing of Júlio César on loan from Championship side Queens Park Rangers. The move was first reported by Brazil’s O Globo, and spread on Twitter by TSN soccer host Luke Wileman. Even though the Brazilian international player is considered to be one of the world’s top goalkeepers, he has yet to play a league game this season for QPR. Manager Harry Redknapp has chosen to play England international player Robert Green over César, and he’s been fantastic this season. Green’s allowed only 21 goals through 29 games, which has helped QPR rise to third place in the Championship table. When Redknapp spoke to Daily Mail, he described César’s situation as “unlucky.” “Rob’s been fantastic and I can’t take him out of the team,” said Redknapp. “However, Júlio’s a great guy, and he needs to play soon, so he can play in the World Cup.”
Playing soon is exactly what César will be doing as he is set to join Toronto’s other big name signings Bradley, Defoe, and Gilberto as the team continues to make news in their expensive offseason. It’s a great thing for the league that Toronto is bringing in both big names and talented young players, but it appears that Major League Soccer rules could have slipped their mind. This is where the team may get themselves in trouble. Per Major League Soccer rules, each team is allowed to have a maximum of three designated players. As of right now, Toronto has four designated players on their roster: Matías Laba, Gilberto, Jermain Defoe, and Michael Bradley. Toronto needs to have three designated players by March 1st when all rosters are to be finalized. This designated player situation coupled with the addition of César and his reported £90,000 ($123,408) per week salary create some headaches. Here are a few things to consider: How can Toronto FC spend money like this under MLS salary cap rules? How is this fair to other teams? Is what they’re doing ethical?
Toronto has spent an abnormally large amount of money for a MLS team this offseason. They’ve brought in a young, promising Brazilian player, a well-known England international player, and United States’ star center midfielder as designated players. Toronto and MLS spent nearly $100 million (salaries and transfer fees included) alone to bring Defoe and Bradley to the league. Despite the signing of four big contacts, Toronto is abiding by all MLS salary cap rules. Gilberto, Defoe, and Bradley’s contracts will at most count as $387,187 against the team’s salary cap, with the remaining amount of their salary being paid out of their team owner’s pockets. That amount, a 5% increase from the 2013 amount, is the expected maximum salary amount a player can make in the 2014 MLS season. Toronto is wildly spending money, but there’s nothing fishy or rule-bending about it. They do, however, have four designated players. I’ll come back to this, though.
Another topic to discuss: How can Toronto sign César to a loan deal, when his annual salary alone is worth more than the expected team salary cap of $3.0975 million for the 2014 MLS season? Well, it’s simple. Even though the details have not been publicly released, César will not be taking a designated player spot. The exact nature of César’s loan is hard to understand and is a bit ambiguous because we don’t know how much he will paid in salary. MLS, Toronto, or both could potentially pay a sum of money to QPR that will cover both the cost of the loan fee and some of César’s salary, which will appear off budget. For example, César may only show up on the team budget as being paid $200,000 in salary, but he could be earning much more than that. The exact amount that will show up on Toronto’s books versus the amount César will actually be making depends on how much salary cap space Toronto has left. A second way that César’s salary could be adjusted is by buying down his salary using allocation money. The allocation money can be used to reduce his salary hit on Toronto’s budget, so they can fit him under the team salary cap. If Toronto still cannot fit César on their roster using allocation money, they may be forced to trade players to open up cap space and give them some additional allocation money. At most, it will show that he’s earning the maximum player salary amount of $387,187. It is assumed that QPR will then continue to pay the remaining amount of his salary. The thought behind this is to alleviate some money off of their books, and give César solid playing minutes in a World Cup year, which could make him more desirable on the transfer market if he performs well. This may be all good and positive for QPR over the course of 2014, but is this fair to the rest of MLS teams? Is it fair for Toronto to bring in a player, who’s being paid a little over $6 million dollars per year, but only have a small portion of his salary appear on Toronto’s books? Maybe not, but it’s a situation that MLS’s own salary rules and regulations created. The thought behind the salary cap is to increase parity and league growth. It’s for sure helping the growth of the league, but its own loan loopholes may not be helping the parity of the league. It may not be the fairest situation, but hey, these are the rules that were agreed upon by team owners, so they’ll have to roll with it. The financial flexibility of loans is something they’ll definitely be looking at once they enter the Collective Bargaining Agreement discussions after this season.
I’ve talked about whether or not Toronto is allowed to spend money in the way they have, and if it’s fair to bring in a player like César, but are their actions ethical? Before Toronto signed their three new designated players, they already had one in Matías Laba. Now, they have one more than the league-mandated amount of three designated players. How are they going to fix this before March 1st, when all MLS rosters have to be finalized? Well, there’s no way they’re going to get rid of their three new signings, right? Of course they’re not. This unfortunately leaves Laba as the odd man out. Toronto isn’t allowed to restructure his contract to eliminate the designated player tag, so they’re going to have to get rid of him by way of selling him, or loaning him out to another team. According to the Walking The Red, Toronto contacted Columbus Crew about their interest in Laba, while Houston Dynamo and Chivas USA have also been mentioned as potential destinations. It’s a mystery to why Laba has not found a team within the league. His status as a designated player, and a team’s unwillingness to do Toronto a favor, helping them get rid of their fourth designated player, may be potential road blocks in Laba finding a team. Toronto created a mess for themselves, and now they have to clean it up. They knew what they were doing in signing three additional designated players. They knew the league roster rules, they hung Laba out to dry, and put themselves in an ugly situation. MLS league officials have stayed pretty quiet on the Laba situation so far, but what happens come March 1st, if Toronto is unsuccessful in moving Laba? What will be the repercussions of their mismanagement? Will they be docked points before they even play a game? Will Laba even be allowed to play? The next week and half will be interesting to see if anything develops, or Toronto may find themselves in deep trouble. This was not fair treatment or professional practice by team management, nor were their actions in signing César. The loan move was completely legal by MLS rules, but using a loophole in league rules to give themselves a financial advantage is unfair. The ambiguity of MLS salary rules and the potential help MLS may provide in helping Toronto pay part of the loan fee to QPR makes the move borderline unethical. Using the league’s help to pay for a player’s fee or his wages, which could appear off-budget, is unfair to the rest of the league. Manipulating his salary in this way, so they can fit him on the salary isn’t fair.
Even though these actions are unfair to the rest of the league and are borderline unethical, it’s all supposed information. We don’t know what Toronto will ultimately pay César salary wise, and we don’t know if the league will even help at all. That is the worst part about this loan saga, as people can complain and say it’s unfair, but in the end, we don’t know how much is spent on the loan fee, how much he’ll ultimately be paid, and who will be paying. What we do know though is the ambiguous nature of MLS salary and transfer rules is unfair to the rest of the league, and its fans.