NWSL announces roster-building mechanisms for incoming expansion teams

As the National Women’s Soccer League prepares to welcome two expansion sides to league play in 2026, Boston Legacy FC and the to-be-named Denver team, the NWSL announced Thursday the roster-building assets that will be made available. The league also announced broader updates to player movement structures through the immediate introduction of intra-league loans.

After the introduction of full free agency and elimination of the NWSL Draft and Expansion Draft, the NWSL had to establish alternative methods to “support incoming teams while maintaining competitive balance across the league,” NWSL VP of Player Affairs Stephanie Lee said in a statement.

To begin with, each team will have access to $1,065,000 in allocation money, with 50% of the funds provided by the league and the rest funded by the teams at their discretion. Teams can begin spending those allocation funds on July 1, 2025, and have until December 31, 2027, to use all of their funded allocation money.

Allocation money is funds that can be accessed outside of the salary cap to apply toward higher salaries or to use as a trade asset. It is funded (or activated) by paying the league office to have whatever amount they want to access, up to the limit available to them. If allocation funds are not purchased, they do not roll over. If the league salary cap increases, the NWSL says that the available allocation money will increase proportionally.

The transfer fee threshold that all teams will spend against in 2026 is $605,000, following the annual 10% increase from the $550,000 threshold in 2025. However, expansion teams will have an additional $968,000 valid from January 1, 2025, through the conclusion of the secondary transfer window in 2026. The secondary transfer window in 2025 closes on August 25; that date will not necessarily be the same in 2026.

Where a team sits concerning the transfer fee threshold is determined by adding the money spent on incoming player transfers and subtracting outgoing transfer fees (money that other clubs pay them in fees). It is not a hard cap, however, all teams can remain above the net threshold, but they will incur a 25 percent hit to the salary cap if they do.

For a more in-depth explanation of allocation money and transfer fee thresholds, check out this explainer from Jeff Kassouf.

The two expansion teams are currently able to utilize a 6-month period in which they can sign players without being subject to the salary cap. The window opened on January 1 and closes at the beginning of the secondary transfer window on July 1, 2025. Any players signed during this period must have a net-zero salary cap impact by being: loaned out to a team that picks up the full cost of salary and bonuses; qualified to be placed on SEI; or allocation money must be used to cover the salary cap charge.

When the secondary transfer window opens, Boston and Denver will have a limited salary cap of $250,00 to sign college players or out-of-contract international players through the end of 2025.

During this time, expansion teams do not have to meet the minimum roster size, but they can’t exceed the maximum roster size. They will have to be compliant with standard roster rules in 2026.

For the first time in NWSL history, the league has officially allowed its teams to loan players to other NWSL teams, effective immediately. It is a common practice across other leagues around the world that will now be available to all 16 teams, including Boston and Denver.

Lee said that intra-league loans being available to all teams “adds greater flexibility and opportunity for player development and strategic roster management league-wide.”

The intra-league loan rules fall in line with inter-league rules established with the new Collective Bargaining Agreement requirements. The loaned player must consent to the loan, receive their full contracted salary for the duration of the loan, and can’t be traded, transferred or re-loaned to a third team. Loans must receive league approval and meet FIFA’s loan duration requirements.

A maximum of three players can be loaned into or out of any single team. No more than 12 players, combined in and out, can be on loan at any given time.

Loaning players out provides salary cap relief to the loaning team up to the amount covered by the receiving team. The applicable salary cap relief can be negotiated between teams, but the receiving team must pay at least the equivalent of the league’s minimum salary on a daily rate basis.