Toronto FC faces roster overhaul challenge: Too many contracts, too little cap space

In the aftermath of a challenging season, Toronto FC is confronted with a significant hurdle that needs addressing—the surplus of players on guaranteed contracts. Jason Hernandez, speaking at the club’s post-season availability on November 10, emphasized that TFC's primary focus is to alleviate the cap space crunch by moving players off the books.

Hernandez, displaying an unusual candor for TFC management, straightforwardly stated, “We don’t have enough players at the level needed to have the success we want in MLS in enough areas of the field.”

The current roster's inadequacy for John Herdman’s favored 3-5-2 formation is evident, lacking sufficient center-backs, midfielders, and wing-backs. While Herdman's wishlist for reinforcements is extensive, the available budget poses a significant constraint, making substantial changes a daunting task.

Even with the 2024 salary cap increase, the necessary wiggle room to revamp the roster remains elusive. MLS is exploring the potential expansion of permitted designated players from three to four, a proposal set for league owner voting on December 14.

One tool available to MLS teams is the option to buy out one contract per year, providing an opportunity to offload a player and create valuable cap space, albeit with continued financial liability for the original contract terms.

Hernandez acknowledged the club's openness to utilizing the buyout but emphasized its dependence on the success of other means to offload contracts. The buyout is most effective when clearing substantial contracts, as using it on lesser-paid players yields minimal cap relief.

Traditionally exercised in the winter off-season, the buyout, which entirely removes the contract from the cap hit, can now be used at any time throughout the year. TFC's last buyout was of Jozy Altidore before the 2022 season.

The crucial question as TFC heads into 2024 is who will be the recipient of the team's one allowable buyout, available in January. The decision hinges on strategic roster considerations and financial implications, setting the stage for a potentially transformative off-season for Toronto FC.