Breaking down Atlanta United’s financial windfall in Almiron sale

Miguel Almiron’s league-record sale to Newcastle United FC brings with it an unprecedented financial windfall for Atlanta United and MLS. In selling Almiron, Atlanta is proving that its system works: Buy young players with potential, even for high sums, and watch them accrue value and win you championships before selling them on.

But with MLS’s tedious rules and single-entity structure, how much money is Atlanta actually receiving here? Here’s our best effort to break down how much of the reported $27 million dollar fee Atlanta will put in its coffers.

The first step is straightforward enough. We need to find the total cost of Miguel Almiron, which includes the transfer fee that was paid for him plus the wages spent in excess of his budget/cap charge (i.e. for designated players, MLS funds the player’s wages up to the budget charge, and everything else is paid by the club). Note that agents fees and contract incentives could move these numbers a bit, but this gives us a good ballpark estimate:

Next, we’ll determine how much Atlanta gets out of the deal vs. MLS’s rake. To do this, we subtract the player cost calculated above from the transfer fee reportedly paid by Newcastle (we’ll come back to the player cost), then divvy that number up into correct portions for each party.

So Atlanta, in essence, has $11.3 million more in its pocket than it did before the club signed Almiron. That’s pretty amazing to think about. Now, adding back all the wages and cost it took to acquire him back into the equation (as the club gets to keep 100% of the transfer fee up to this amount):

So, of the reportedly agreed upon $27M transfer fee, Atlanta keeps $23.2M, and importantly, has the option (which they will certainly take) to use $750k of the transfer profit as General Allocation Money (essentially more spending power towards the team’s salary cap).

After pulling out the General Allocation Money, the remaining amount can only be used either to pay for the costs of other designated players (e.g. new signing Pity Martinez, or Josef Martinez’ new wages), or by way of investment in an area it otherwise would not have spent funds on (e.g. a new training facility).

Now that we see Atlanta’s profit in this transaction, it’s clear to see why the club has shown no hesitation to acquire players for some of the most expensive sums in league history in Ezequiel Barco and Pity Martinez. Barring catastrophe, these players will likely increase their values significantly playing stateside. It’s actually a lower-risk approach, if done right, then is signing older players at the ends of their careers for large sums. Aside from any marketing gains, those expenses are sunk costs. Transfer fees, on the other hand, are more like a security deposit (at worst) and ideally an asset. As MLS’s TV rights improve and expand and the league continues to improve and grow, the “shop window” will get fancier and European clubs will continue to spend for these players.

And lastly, if you’re wondering why the club seems to have gone after a star in his prime like Martinez instead of a young prospect like Barco or Almiron as its newest designated player and Miguel Almiron replacement, you might speculate that because of these league rules and the enormity of the transfer profit on the Almiron sale, the club was always going to have to spend more on their next DP signing — thus the more expensive South American Player of the Year, Pity Martinez.

Editor’s Note: An earlier version of this article stated that the league enforced transfer profits to be spent. While team owners are limited in ways the money must be spent, they are allowed to defer reinvestment of funds if so desired.