Why LA Galaxy Must Pay $350K to Charlotte FC to Sign Marco Reus? Understanding Discovery Rights

The trend of joining MLS continues with Marco Reus being the latest addition. After an illustrious 12-year career with Borussia Dortmund, the former German international will finally bid farewell to Europe. The midfielder will be joining LA Galaxy. Although there is no transfer fee associated with Reus, the Galaxy is paying $350K—not to Dortmund, but to their MLS arch-rivals Charlotte FC, in the name of Discovery Rights. But why is Charlotte profiting from this deal, and more importantly, what are Discovery Rights?

Well basically, it’s a process that allows clubs to sign or scout players who are not currently under contract with MLS and are not part of other assignment mechanisms, like the MLS SuperDraft or the Allocation Process. Each team has a discovery list of up to seven players. These players can hail from any part of the world and are currently playing in MLS. The list allows teams to assert an interest in players they may want to sign in the near future.

Interestingly, teams can add or remove the player from this list whenever they want. Also, there is no limit on the number of players teams can sign from its particular Discovery List. The best part about this rule is that the teams can also sign players from their rival team’s designated list. For this, a team interested in another team’s DL could either negotiate them for the player or wait for that team to relinquish the rights they had held for that player.

Notably, if there’s a situation when multiple clubs are interested in a player from another team’s Discovery List, then the preference for the deal is given on a first come first serve basis. This is exactly what happened in the case of Marco Reus, let’s dive more into it.

More details on how Marco Reus was signed by LA Galaxy through Discovery Rights

If a club wishes to sign a player listed on another club’s Discovery List, it can offer General Allocation Money (GAM) to that club in exchange for the right to sign the player. Marco Reus was a part of Charlotte FC’s Discovery List. Hence, this led LA Galaxy to quickly make a call for his signature. Once the contract negotiations with the midfielder over a contract will be done, Galaxy shall pay $350,000 to Charlotte. Yet, it’s more interesting to see in which bracket Galaxy will fit Reus as their 3 Designated Player spots are already occupied by Riqui Puig, Joseph Paintsil, and Gabriel Pec.

To quote another instance, in 2021, Charlotte FC paid a certain amount to FC Cincinnati for Jordy Alcívar’s Discovery Priority. In essence, Discovery Rights essentially allow smaller market teams to publicly claim coveted players, which promotes equity throughout the league. Additionally, by preventing competing teams from bidding against one another for a player, this approach can help curb salary inflation. Overall, the process is quite extensive yet effective. For now, LA Galaxy shall get down to quickly close the deal with Marco Reus which is in the final stages.