The NWSL's board of governors approved a new roster mechanism to pay select star players above the current salary cap, multiple sources confirmed to ESPN.
The proposed mechanism still requires consultation with the NWSLPA, however, because of its effect on the salary cap and per the terms of the league's collective bargaining agreement.
ESPN first reported Wednesday that the NWSL's board was nearing such a resolution to its salary cap issue, which has been compounded recently by uncertainty regarding Washington Spirit forward Trinity Rodman's future.
The new mechanism, which multiple sources said has been dubbed behind the scenes as "High Impact Player" to describe who would be eligible for the new funds, would allow teams to spend up to $1 million over the salary cap on top-end players while incurring only a portion of that salary as a cap hit.
In the short term, the new rule could allow the NWSL and the Spirit to keep Rodman from departing as a free agent. The creation of the rule, however, does not solve Rodman's future without the Spirit and the USWNT star also striking a deal -- which has yet to happen.
But the NWSL board's adoption of this rule also has long-term implications based on who qualifies for what will become the league's top salaries.
Sources told ESPN that the exact qualifications for players eligible for the new funds had been refined and updated in recent days ahead of the NWSL's board vote, which concluded Thursday.
The spirit of the rule, however, is that there will be guidelines for teams on who qualifies as a "High Impact Player," and that the funds should be spent on retaining and attracting the world's best talent. Those guidelines would vary from the league's previous form of allocation money, which was used freely by teams in all sorts of transactions.
Sources said that a High Impact Player (HIP) must meet some requirements from a list of both sporting and commercial benchmarks to be eligible for the funds.
Sporting benchmarks discussed in board deliberations included rankings on lists like the Ballon d'Or, appearances on the NWSL Best XI, or USWNT minutes earned, all in recent years.
The board also discussed players' commercial profiles, sources confirmed, further indicating the profile of players being targeted by these new funds.
Among the qualifications discussed were even third-party media outlet rankings of top world players and most marketable athletes, sources said, although it is unclear if those qualifications made the final criteria.
The cap charge of each High Impact Player was still being finalized ahead of the board vote this week. One source told ESPN that the cap hit of a player's salary will need to be 12% of the team's total cap before the HIP funds can be utilized.
The new mechanism needed at least 11 of 16 board votes to pass, one source confirmed to ESPN.
Rodman, as the most prominent and pressing example, is expected to meet several of the proposed requirements for a High Impact Player.
Sources said that if a player meets the salary cap charge and some combination of the sporting or commercial requirements, a team can spread the additional funds on more than one player.
Board approval is not necessarily the final hurdle for the rule. Section 8.16 of the league's collective bargaining agreement with the NWSL Players Association states: "NWSL may in its discretion, after consultation with the NWSLPA, reduce or eliminate the Salary Cap charge against the Team Salary Cap for certain roster classifications."
The way sources lay out the High Impact Player concept, the league is creating a reduced salary cap charge for a specific roster classification.
The NWSL's board convenes next week for a year-end meeting that was scheduled months ago.
The proposed High Impact Player concept is meant to allow NWSL teams to compete financially for the world's top players despite keeping a salary cap. The departures of USWNT stars Alyssa Thompson and Naomi Girma from the NWSL earlier this year renewed concerns about the NWSL's ability to compete in a rapidly evolving global player market.
Both players left for transfers of over $1 million to join Chelsea, which is one of a handful of teams in Europe willing to pay players salaries that approach or exceed seven figures.
Under the NWSL's current salary cap, a team can't pay seven figures to one player without sacrificing the rest of its roster construction. The adjusted salary cap in 2025 after revenue sharing was $3.5 million for a roster of at least 22 players.
The NWSL's new concept is a crossover -- or, perhaps, an evolution -- of multiple MLS roster concepts and an old NWSL mechanism.
A "High Impact Player" sounds a lot like a Designated Player in MLS nomenclature, and the concept of attracting the world's best talent is equitable. However, MLS teams can pay Designated Players whatever they want for a set maximum salary cap charge; NWSL's proposed rule will still cap the spending of these new funds.
That makes the NWSL's new concept more akin to allocation money. MLS has multiple forms of that, including "Targeted Allocation Money" that was created to increase the pay of starting-level players and deepen rosters. TAM has a cap, too, similarly, but the NWSL's new rule is clearly geared toward the world's elite players in a more specific way than TAM.
Ironically, the NWSL is nearly done phasing out its form of allocation money, which it first introduced in 2019 to increase the salaries of top players outside of the salary cap. The NWSL announced in January 2024 that allocation money would be phased out completely by the end of 2026, and several sources applauded the move at the time as a way to simplify team finances.
But expansion teams have since been awarded special allocation money in lieu of drafts that were eliminated in the new CBA, and the introduction of a High Impact Player brings back a similar mechanism that will exist outside of the hard salary cap.
Regarding Rodman, specifically, there is also an active grievance filed by the NWSLPA on behalf of Rodman against the NWSL for what the players' association called a "flagrant violation" of her free agency rights and at least five parts of the CBA. That was filed Dec. 3, days after a deal between Rodman and the Spirit was vetoed by NWSL commissioner Jessica Berman. The league has 14 days to sustain or deny the grievance in writing.
If it is not resolved within 14 days, a grievance committee consisting of one representative appointed by the league and one by the players' association will review the matter.
If that committee cannot resolve the issue, the dispute will go to arbitration (which both parties could jointly agree to proceed to directly).
In related news Thursday, 39 members of the Democratic Women's Caucus and House Democratic Caucus wrote a letter to Berman to "urge the NWSL to work in good faith with the NWSLPA and Ms. Rodman to resolve this matter in a timely and transparent manner consistent with federal labor law requiring that the terms of collectively bargained agreements be honored."