NWSL Money and Net Transfer Fee Threshold, Plus Their Implications for San Diego Wave, Explained

Assuming the Girma deal is real, San Diego has a giant pile of money. If they wait too long to use it, the net transfer fee threshold may bite them.

Yesterday the Athletic reported that the best centerback in the world is leaving NWSL club San Diego Wave for a $1.1 million transfer fee. If true, San Diego Wave will receive $1.25 million in transfer fees ahead of the 2025 season along with $300,000 in allocation money between the Naomi Girma deal and Jaedyn Shaw’s transfer to North Carolina Courage. As we watch transfer fees and salaries increase at a rapid rate, even recently changed rules may not keep up with the market. San Diego Wave in particular may pay the price if they cannot find a way to spend their funds this season.

Hameltion, CC BY-SA 4.0 , via Wikimedia Commons

In January 2024, the NWSL announced a variety of new salary cap and spending rules, including a substantial salary cap increase, the phasing out of allocation money, and the imposition of a net transfer fee threshold.

Allocation Money

Described elsewhere as “NWSL bucks,” allocation money is transaction money that teams could opt into each year up to a league maximum, with the option to roll the money over into future years. Jeff Kassouf’s explanation that allocation money is a bit like purchasing a gift card before you actually use it is most accurate. We do not know how much allocation money any team has given teams do not have to publicly announce the amount of NWSL bucks they have purchased at any point in time.

Allocation money can be used for transfers but can also be used to pay players in excess of the salary cap, making it more valuable than traditional transfer fees. Allocation money will be phased out on December 31, 2026. If teams still have allocation money at that time, it will essentially expire and be useless.

Transfer Fees

Transfer fees are money paid or received by a team in exchange for a player. While you’ll see the terms interleague transfer fee and intraleague transfer fee, because the net transfer fee threshold rule does not differentiate between the two, there is no meaningful difference.

Transfer fees do not go toward the player’s salary. They are fees paid in exchange for taking over the player’s remaining contract. Now that the NWSL requires player consent for trades, you’ll hear increasing use of the phrases “club terms” and “personnel terms.” “Club terms” are when the two clubs have agreed on the trade. “Personnel terms” are when the player and the new club have agreed on the salary and perhaps a coinciding contract extension, whatever the player and the new club need for the deal.

Salary Cap

The salary cap is the maximum amount of money paid to the players in a season. Player salaries are confidential unless a player agrees to release the information publicly. The salary cap itself became more complicated to predict with the new CBA, which now breaks the salary cap into two components: (i) a “base salary cap” and (ii) a supplement determined by the prior year’s media and sponsorship revenue.

The base salary cap for 2025 is $3.3 million, scheduled to increase annually until it hits $5.1 million in 2030, and with potential increases from a supplement. No supplement has been publicly announced for 2025. The base salary cap only increases to $3.5 million in 2026.

Net Transfer Fee Threshold

Implemented in 2024, the net transfer fee threshold works to make sure no team can overspend on transfer fees. The net transfer fee is defined as the difference between the transfer fees a team spends and the transfer fees a team receives. For example, if a team spent $1 million dollars in transfer fees and only received $400,000 in transfer fees from outgoing transactions, that team’s net transfer fee would be $600,000. The net transfer fee threshold is the maximum net transfer fee a team can have for the season without incurring a penalty in the form of a reduction of the team’s salary cap by 25% of the exceeding amount.

Allocation money does not impact a team’s net transfer fee, but it can be used to avoid the salary cap penalty.

The net transfer fee also does not differentiate between inter and intra league transactions. This failure to differentiate is also how NWSL teams are likely to get themselves in trouble; teams in other leagues do not have spending caps and can play this game differently. If we were in a closed system and could not transact with other leagues, this rule would be less of a problem.

So far we are aware of one team that has been hit with a salary cap penalty for exceeding the net transfer fee threshold: Orlando Pride when they signed Barbra Banda in 2024. This penalty is far from a death sentence but it is something to keep in mind.

The net transfer fee threshold reportedly increases 10% annually. For 2025, the net transfer fee threshold is $550,000, and we should expect it will be $605,000 in 2026.

Why Does San Diego Care?

Could San Diego in theory just sit on a giant pile of money and wait for the market to catch up? Sure. Could they spend the money on something else? I guess. But the limitations for NWSL teams are in the salary caps and transfer rules, not in the actual cash on hand most teams have given the level of recent investment, so let’s look at how these player transactions could play out in the upcoming seasons. Walk through some of the scenarios with me.

In 2025 the net transfer fee threshold is basically a non-issue. Best we can tell San Diego Wave is sitting on the largest pile of transfer funds in this league, and so far, they have not used it. Their inbound signings are free agents or college students. It’s possible they paid a transfer fee to Rivers Angels FC for Chiamaka Okwuchukwu, but given she was only under contract through the remainder of the 24-25 season and had to sign an extension with San Diego Wave to remain under contract for the entirety of the 2025 season, I cannot imagine it was more than $50,000.

Unless Bonmati really values access to California Burritos, I don’t see how San Diego Wave will spend more than they have received. But San Diego Wave will have the funds to make a run at that level of talent. Call Man City and see if they’re open to talking about Bunny Shaw. Maybe Barcelona would accept a ton of cash for Salma Paralluelo and she’s secretly a massive fan of craft beer. Shoot, San Diego Wave could probably afford both Paralluelo and Keira Walsh at this point given Walsh has so little time left under contract. Oh, and San Diego Wave have $300,000 in allocation money which they can use to exceed the salary cap. Go make a big splashy signing if possible! This is the time.

Could they instead use up the money by making smaller signings? Sure, but there are only so many roster spots and again, they seem to have been keen to fill them without spending transfer fees.

Let’s say, however, that players aren’t eager to come to San Diego. Some hesitancy would make sense given the number of players who either sought to leave or did leave during the 2024 season. Maybe it takes the club a season to rebuild trust among the whisper networks or get players to want to take a chance. San Diego Wave still have the money from the Girma and Shaw deals, but there’s one problem: it’s now 2026 and the net transfer fee threshold calculation has reset. The transfer fee market has increased and while the net transfer fee threshold has increased by 10%, the market has increased by 30% for top talent (this would not be surprising - the previous record for largest transfer fee paid in women’s football is $789,000, set in 2024 with the transfer of Racheal Kundananji to Bay FC). Additionally, the base salary cap has only increased by 6% from 2025 to 2026. So not only does San Diego Wave have a funds reception offset problem, their money will not get them as far.

If San Diego Wave spends the money in 2026, they have the $300,000 in allocation money from the Jaedyn Shaw deal to use to cover any salary cap penalty. This allocation money is roughly the maximum amount they would likely see as a penalty anyway unless the transfer market fee growth rate increases substantially beyond its current rate. And San Diego Wave have to use the allocation money by the end of 2026 anyway. So if San Diego Wave have to wait a year for a big signing, while they will not see the same value for the money that they would have seen in 2025, it is not a complete waste (which is what would happen should this go on into 2027).

TLDR San Diego should go spend the money soon because the women’s soccer transfer market is booming and unlikely to slow down anytime soon. That money is not worth as much next year.