Toronto FC makes allocation money deal with D.C. United to meet roster needs

Toronto FC made a deal with D.C. United on Tuesday, exchanging allocation money to meet their roster needs.

Toronto sent US$337,500 in targeted allocation money (TAM) to D.C. United in exchange for $225,000 in general allocation money (GAM). Both sets of funds are used to pay down player costs.

Targeted allocation money is used to add or retain high-value players and can also be used to reduce their salary cap hit.

General allocation money is a more all-encompassing tool, helping clubs to sign new players or extend their contract for a second year, re-sign existing talent, offset loan and transfer fees or reduce the salary cap hit of a designated player to a limit of $150,000.

Toronto used TAM to sign Dutch international defender Gregory van de Wiel last week. By adding to its GAM funds, it may look to bring back a player like veteran defender Jason Hernandez or midfielder-forward Tsubasa Endoh.