Waiver of Magnus Wolff Eikrem Won’t Impact Seattle Sounders’ Salary Budget Flexibility

The waiver of Magnus Wolff Eikrem ended a short tenure with the Sounders that never ended up being a good fit. Aside a promising start in the Concacaf Champions’ League, the player never got consistent playing time, even with the Sounders decimated by injuries this spring. As it was apparent the Sounders did not see a long-term future with the player, they decided to move in a different direction.

The only question remaining (aside from what moves they’ll make to replace him) concerned his contract status. Media reports indicated that Wolff Eikrem’s contract was guaranteed, meaning that in the event the player was waived, the team would be on the hook for his salary (and the corresponding use of Targeted/General allocation money) for as long as his salary was guaranteed.

However, a Sounders spokesman confirmed to me that the team and player agreed to mutually terminate the contract. That means that the Sounders will not pay him the remainder of his salary for this year. Wolff Eikrem is now an unrestricted free agent and free to sign with any team on a free transfer. Thus, the Sounders have freed up the corresponding salary in their budget for the remainder of the season, and there will be no budget impacts beyond this year (i.e., no need to use the buyout next season, in the event he had more guaranteed years beyond 2018). Of course, the Sounders now have the international slot that he occupied.

The only thing left to determine is how much budget space the Sounders may have cleared up. First, Wolff Eikrem had a salary for 2018 as follows:

Screen Shot 2018-07-22 at 10.49.57 AM

Now, the salaries listed from the MLSPA are not entirely accurate, but for purposes of this story, we’ll go with his listed salary ($546,666.67) as the actual number. The Designated Player (DP) budget charge for 2018 is $504,375, so some form of allocation money was needed to buy him down below that number, since the Sounders have had three DP’s at all points this year. The most the Sounders could have brought his salary down to using TAM/GAM is $150,000, so the Sounders were using anywhere from about $45,000-$400,000 in allocation money for this year.

Since we’re basically halfway through the season, the Sounders have recouped about $250,000 in budget space in pure dollars. What we don’t know (and aren’t likely to know) is how much GAM/TAM the team may have recouped and how that works in the context of his remaining freed-up salary. I have a request of clarification as to whether the team will see the return of any allocation money, but the good news for Sounders fans is that the mutual termination will not hinder the Sounders financially in their attempts to find a replacement this year, and it will likely help.

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