Why Djordje Mihailovic's Toronto move signals the formation of an MLS pecking order
Parity is often Major League Soccer's biggest selling point to prospective fans. The idea that the worst team in the league could be a title contender 12 months later breeds an environment of optimism for most MLS fans. The 2023 LA Galaxy finished 13th in the Western Conference before winning MLS Cup in 2024.
But the landmark decision to allow player-for-cash trades in the winter of 2025, thus creating an internal transfer market free of headache-inducing GAM, could perhaps be the first sign that a pecking order of high-spending clubs is in the process of being formed.
We have already seen a number of eye-opening cash-for-player trades, or as the rest of the soccer world calls them — transfers. Brazilian superstar Evander left the struggling Portland Timbers for MLS Cup contenders FC Cincinnati for a fee of $12 million. LA Galaxy's star center-forward Dejan Joveljić made the move to Sporting KC for $4 million — but one particular transfer stands out as a potentially landscape changing move in MLS.
With Toronto FC announcing the signing of Colorado Rapids star Djordje Mihailovic for $8 million plus add-ons this past week, we perhaps saw the first cash-transfer in MLS that could begin to shape a hierarchy among the league's ranks.
“As we determined the best strategy to approach our team’s transformation, we identified Djordje as the perfect foundational piece for our club, as one of the most prolific chance creators in MLS," Toronto GM Jason Hernandez said. "Djordje’s ability to deliver high-level output week in and week out is widely understood, but his winning mentality and desire to elevate TFC were key factors in securing him as our new number 10.”
A star DP attacking midfielder moving from the 8th place team in the Western Conference to the 12th placed team in the east mid-season may seem like a surprise move, but when we dig deeper into the spending habits of the two clubs, the picture gets a little clearer.
In 2025, Toronto's annual wage bill of $35 million (most of that soon to be off the books with the departures of Federico Bernardeschi and Lorenzo Insigne) ranks just second in the MLS salary spend charts behind Inter Miami's $46 million. Colorado's annual wage bill of $15 million ranks 22nd.
In soccer, money talks. Typically the teams with the highest wage bills are the most successful. A UEFA study of the European game once revealed that the club with the highest wage bill won their domestic national title 29 times (56% of the time), while the club with the second highest wage bill won 11 times (21%).
Toronto FC is one of the anomalies of this trend however, having not made the MLS Cup Playoffs in any of the last three seasons.
But a closer look at the salary spend in MLS shows that high wage bills do tend bring success. MLS Cup champions LA Galaxy, Supporters Shield winners Inter Miami, and serial contenders LAFC and FC Cincinnati all rank in the top-six of the league's salary spending charts.
Now back to Mihailovic. Toronto's decision to spend $8m to make the former USMNT attacker the "face of the new era" in the Queen City could reveal why teams willing to splash the cash on star players already in MLS could begin to fracture the league's vaunted parity.
If the "bigger clubs", or clubs willing to spend on both transfer fees and wages year on year start hunting for star signings within the league as opposed to abroad, the clubs less prone to spending sprees could quickly get left behind as their players get poached.
With cash-transfers now fully implemented, there is no reason for clubs like Inter Miami, LAFC, or Toronto to shy away from flexing their financial muscle and attract stars from smaller market MLS clubs.
The Designated Player/U-22 initiative roster scheme helps keep that disparity in check for the time being, but with roster restrictions potentially set to be relaxed in the coming years, the higher spenders will surely break away in a fashion more akin to the major soccer leagues around Europe.
