The NWSL announced several major updates to their roster rules on Thursday, including the increase of the salary cap from $1.375 million in 2023 to $2.75 million in 2024. The 2024 figure means each of the league's 14 teams will have $775,000 more to work with than they did last season when including the fact that clubs had the option to purchase up to $600,000 in allocation money from the NWSL. The salary cap increase will be seen as a suitable replacement for allocation money, which the NWSL will begin to phase out starting this year.
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Teams will no longer be able to purchase allocation money from the league, nor is it a tradable asset any longer. Any allocation money that teams currently have will need to be used by Dec. 31, 2026.
The league introduced allocation money ahead of the 2020 season as a method for teams to offer top dollar to high-profile players and in effect acted as additional funds on top of the salary cap. It was designed to keep NWSL teams financially competitive with their counterparts overseas, but the league is opting for a more streamlined approach as it pertains to player salaries during a period of exponential growth in women's soccer. Look no further than the league's salary cap, which sat at just $650,000 just four years ago when they ushered in the option to buy another $300,000 in allocation money.
Though the announcement came a few days into the new year, clubs were seemingly operating within the framework of the NWSL's new roster rules throughout the offseason. In an interview with Attacking Third last month, Bay FC head coach Albertin Montoya teased that the salary cap would be around the $2.7 million mark, while NJ/NY Gotham FC seem to be taking advantage of the additional funds by signing two sought-after free agents in Crystal Dunn and Tierna Davidson. The Houston Dash also made fellow free agent Maria Sanchez the league's highest-paid player last month with a deal reportedly worth $1.5 million.
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Additionally, the league has established a new policy as teams compete in the global market: the net transfer fee threshold of $500,000, which applies to both intra-league transfers as well as deals done with international counterparts. Transfer fees for incoming players will be offset by those for outgoings, and teams whose net fees paid are in excess of the threshold will receive a 25% charge towards the salary cap.
The NWSL also freshened up guidelines for its under-18 entry mechanism, limiting teams to four players under the age of 18 between their rosters and entry lists, as well as devised a related party transaction policy that would limit player movement between an NWSL club and an overseas club that share the same ownership group.
The latter policy currently only applies to the Washington Spirit and the OL Reign, though the Reign will likely no longer see this as a problem with an impending ownership change. MLS' Seattle Sounders are reportedly in advanced talks to buy the Reign from OL Groupe, per Sportico, and a deal is expected to be complete in the first quarter of 2024.
