There will no be DP slots for Eddie Johnson, Landon Donovan and Carlos Ruiz next year. Despite originally declaring that the grandfathering in of these players would only occur for one year, the MLS has gone back on it's word. Those 3 players won't count as designated players in 2008 despite making more than $400,000 for the year.
If you're thinking that's good news for all 3 teams, it really benefits Los Angeles the most. Kansas City did not have not used their DP slot. There could be several reasons for it but it's likely they didn't want to make a move for a DP that was beyond a 1 year commitment knowing in 2008 if Eddie Johnson was still around that they would need a 2nd slot for him.
FC Dallas brought in Denilson half-way through the 2007 season. But his contract was only guaranteed for 2007. Even if Denilson had performed wonderfully on the pitch, which he has not, FC Dallas wouldn't be committed to bringing him back in 2008. They wouldn't have had to give away an arm in the leg to keep Carlos Ruiz (well, assuming they'd actually want to do that).
The Los Angeles Galaxy were the only team of those 3 facing a situation where they would have had to secure a 2nd DP slot to keep their grandfathered player, Landon Donovan. It was highly unlikely that the Galaxy would trade away David Beckham. For 2008 they were, as the original DP rule stated, going to need a 2nd DP slot since Landon Donovan is making a something a bit short of a million a year. The problem is every team knows that to be the case. There was no poker to be played; no picking up a 2nd DP slot on the cheap like New York did last year. Worse, Los Angeles didn't have much to offer other teams. And what little they had to offer would also mean giving away what talent they did have on rather mediocre 2007 roster.
I'd love to know why they did this. As the season wound down there was a lot of chatter about the MLS adding a 2nd DP slot for 2008. That seemed odd since they hadn't made the 1st one permanent. It was a limited time deal (3 years, IIRC) that was to be reviewed in the future. More so most teams did not have a designated player, let alone were looking for one. The big three - LA, Chicago and NY - had all used theirs. FC Dallas was the only other team to do the same. And New York had already secured a 2nd DP slot from Chivas USA before the season started. Why would most MLS owner / investors be in favor of opening to a second one? Having a home game or two with a larger crowd would be nice but they're already losing the arms race; why did a bigger hole for themselves?
My two-bits worth on it is that Los Angles was the largest source of that push. Chicago may have played along seeing the attendance boot Blanco gave them. It seems unlikely that many owners were taking the idea of a 2nd DP slot seriously. They may have even recognized that LA was pushing it. And if they thought the league was taking it seriously, they may have felt it had a chance despite a lack of strong support by most ownership groups. So permanently grandfathering in Landon, Eddie and Ruiz may have seemed like a good way to dodge the bullet of having pressure to fill not only one but a 2nd designated player spot. If that's the case, chalk one up for LA in the sly politics column.
The remaining question is how this will be treated for the salary cap. I would assume that they'll be treated as a 2nd DP which means only $350,000 of their salary goes toward to the team's cap. The question is, what will that cap be? It'll be tough to put together a complete roster with $750,000 of cap space tied up in just 2 players when the cap is unlikely to be much beyond $2 million.
SI's article on this one is here.