What is a Designated Player? How MLS star transfers work

Player transfer fees in Europe seem to increase exponentially every single transfer season, but things aren't quite the same in Major League Soccer – where clubs are given only three Designated Players whose wages are allowed to be greater than the league average.

So what is the Designated Player, what is the average salary cap for MLS and why was the rule implemented? GOAL takes a look.

1. What is the Designated Player rule in MLS?
2. When was the Designated Player rule introduced?
3. What are current MLS salary caps?
4. Past and current MLS Designated Players

The Designated Player Rule in MLS was implemented alongside the salary cap regulations ahead of the 2007 season.

The rule allows each club participating in MLS to sign up to three players who will not be considered under the team's salary cap (either through wages or the transfer fee), which enables MLS sides to sign and compete for high-profile players from the wider overseas international market.

MLS player salaries are limited by a salary cap that has been in place since the league's inception in 1996, which was introduced to prohibit team owners from excessive spending on player salaries and to ensure a fairer balance among teams who weren't as financially well-off.

MLS has since also introduced a wide range of initiatives to improve the quality of players purchased while still considering the salary cap – such as rules relating to Designated Players and allocation money that allow for additional wage spending that is exempt from the salary cap.

The Designated Player (DP) rule in MLS allows for teams to sign up to three players whose salary exceeds the maximum cap. Each DP player counted for $612,500 against the cap in 2022, unless the player joined his club after the opening of the Secondary Transfer Window, in which case his budget charge was $306,250..

Meanwhile, a Young Designated Player, a big signing who is under the age of 23, counted for $150,000 towards the Salary Cap if they were under 20 and $200,000 if they were between the ages of 21-23.

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The Designated Player rule was introduced in anticipation of LA Galaxy's signing of former Real Madrid and England star David Beckham in 2007.

Beckham was the first high-profile and internationally recognized player to sign for an MLS side and the Designated Player Rule has since been unofficially dubbed the 'Beckham Rule'.

The ex-England midfielder signed a lucrative deal worth $250 million (£200m) over the course of five years at the Galaxy, and his signing started a trend for big-name stars in Europe to follow in his steps and finish or further their careers in MLS.

The LA Galaxy have famously made big use of the Designated Player rule, with past signings including Steven Gerrard, ex-Tottenham forward Robbie Keane, Landon Donovan, who arrived from Bayer Leverkusen, legendary striker Zlatan Ibrahimovic, and, of course, Beckham.

Wayne Rooney was D.C. United's Designated Player after leaving boyhood side Everton to join MLS in the summer of 2018, and has since become the club's manager.

New York City FC, who are owned by the same parent company of Manchester City, have also signed high-profile Designated Players in the past, their first being David Villa from Atletico Madrid. The former Spain international was followed by Frank Lampard and Andrea Pirlo.

Arsenal legend Thierry Henry was a Designated Player for the New York Red Bulls from 2010-14, having signed for the side from Barcelona, and was followed by Rafael Marquez (also Barcelona) and Tim Cahill (Everton).

Ex-Brazil and Real Madrid star Kaka was Orlando City's first-ever Designated Player when he signed for the side in 2014 from Milan, while Freddie Ljungberg was Seattle Sounders' first DP when he transferred from West Ham in 2009.

Bastian Schweinsteiger, Sebastian Giovinco, Miguel Almiron, Gonzalo Higuain, Jermaine Defoe and Didier Drogba are among the other big-name players to have called MLS home.

Current MLS Designated Players

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Despite some notable departures in recent years, there are still several big-name DPs spread across MLS.

In terms of familiar faces from Europe, Toronto FC's Lorenzo Insigne, LAFC's Carlos Vela, the LA Galaxy's Javier 'Chicharito' Hernandez and the Chicago Fire's Xherdan Shaqiri have all played at the top level that the game has to offer.

But MLS clubs have gone younger with DP signings in recent years, with Argentinian World Cup winner Thiago Almada headlining a group that includes Uruguayan star Facundo Torres and Brazilian up-and-comer Talles Magno, all of whom have been linked with top clubs.