More on the Jean Philippe loan…

Obviously, there is a little bit of confusion about the whole loan vs. allocation thing when it comes to San Jose’s acquisition of Peguero Jean Philippe. You would think that the whole point of getting someone on loan is to not have to spend any money, yet there have been some reports that the Quakes spent allocation funds to land the Haitian. Here’s what I know.

In short, the only item costing the Quakes any money is Peguero’s salary (and what that is I don’t know. Yet). CLS originally reported on Tuesday that the Quakes did not have to send any compensation to New York, in order to acquire Jean Philippe. This is because MLS received a transfer fee in the neighborhood of $750,000 when they sold Jean Philippe to Brondby in 2006. That hasn’t changed.

Now, according to a source, San Jose did not have to cough up any additional allocation funds either. So they basically got a player with a respectable strike rate in MLS, without having to fork over any player acquisition assets, be it players, draft picks, or money.

The confusion arises from the way former MLS players are brought back into the league. When a player is sold by the league and returns to MLS, they have to go through the allocation list, as opposed to being a discovery player, which makes sense. Everyone in MLS knows who Jean Philippe is, so instead of everyone putting a discovery tag on him, he goes to the allocation list instead. Since the Quakes were top of the list, they had first crack at him (I’m hearing that Toronto was also interested.) Now San Jose is at the bottom of that list, despite not spending any allocation money. Yes, it’s somewhat counterintuitive, but I’ve been told that this is the way it works.

Teams do have the ability to “buy down” a players salary with allocation funds so that it takes less of a hit against the cap, although from what I’ve been told, San Jose didn’t in Jean Philippe’s case.

If you’re wondering why not just buy Jean Philippe outright, the reason for that is it would have cost much more and likley would have required a lengthy negotiation. With the transfer deadline set at April 15, time and money were two commodities that the Quakes didn’t have, so a loan was the best way to do the deal quickly and cheaply.