Earlier today, Vancouver Whitecaps FC announced that they had sent $277,500 in Targeted Allocation Money or TAM to Colorado Rapids SC in exchange for $185,000 in General Allocation Money or GAM. Now, before you start scratching your head, there is a method to this apparent madness.
In an exceeding bit of generalisation, TAM is meant to bridge the gap between Designated Players and regular Players. Any player earning more than $504,375, all figures US, automatically becomes a Designated Player. A club can apply TAM to their Budgeted Salary to make them a regular player, as the Whitecaps did with Kei Kamara.
GAM on the other hand, can be applied to a Designated Player, paying their Budgeted Salary down, but is mostly used on the regular Players, like for instance, if the 'Caps were close to the ceiling, and wanted to officially add David Edgar.