Multi-billion-dollar team valuations raise the bar even higher on trying to unload those shares. MLS has pushed the idea of a $400 million deal in recent years, but that is out the window without the national team. It boosted capacity to more than 25,000 seats and satisfied part of the season ticket waiting list of roughly 12,000 fans at the time itching to get their hands on seats. And for the period that they do own the team or if they never sell investors are on a pretty fun ride. It seems, however, that the most reasonable projection is somewhere in the middle. But it does paint a picture of a stable, cost-controlled league one that, in theory, should slowly attract more fans, improve its level of play, pull in more revenue and have its clubs increase in value. Those sales came a couple of years after fellow MLS academy alums Alphonso Davies and Tyler Adams were sold to German clubs Bayern Munich and RB Leipzig, respectively. Total Market Value. Theres going to be a lot of things you can watch on television, on your laptop, your phone, that can be commoditized, theres substitutes for. Clubs big clubs occasionall, MLS clubs also share revenue. We thought it could be fun and were making a great macro bet on the growth of the sport.. It has all the pieces in place from fan base to demographics to stadiums to national television to digital and social exposure to achieve that goal.". MLS owners are protected in their current setup. The trend continued in February 2020, when LAFC owners bought half of minority owner Vincent Tans 20 percent stake in the club at an overall valuation. After years of sellouts, the Timbers completed an $85 million renovation of Providence Park in 2019 to add 4,000 seats to its home venue, which originally opened in 1926. That figure tracks with the $4.3 million payment that The Athletic reported D.C. United received from SUM in 2016. A typical, non-COVID transfer window sees several Premier League clubs spend more on a single transfer than most MLS teams spend on their entire roster in a given season. In order to grow in the way it says it wants to, MLS simply must get significantly more money from broadcast rights. Tucker Kain, Brandon Schneider, Mark Shapiro, Chard Hurley, Peter Guber and Mitch Lasky are a sampling of the All-Star ownership group put together by lead investors Larry Berg, Brandon Beck and Bennett Rosenthal. The NHL doesnt have wonderful growth prospects, said Zimbalist. The ownership bench includes a whos who of executives with deep knowledge of venues, events, media, marketing and technology. Los Angeles FC ranks first at $860 million, while the Colorado Rapids rank last at $370 million. LAFC has ranked eighth in average home-game attendance, but thats a factor of limited capacity, not demand; the team has sold out every one of its home games despite ticket prices that are far and away the highest in the league. The pandemic largely kept fans away from matches in 2020, but MLS has established itself as a well-attended league over the last five-to-10 years. The club will pay Bridgeview a total of $65 million through 2037 to get out of the lease. The club will pay Bridgeview a total of $65 million through 2037 to get out of the lease. Mansueto has pledged to explore constructing a soccer-specific stadium and to build a training facility in Chicago. When Joe Mansueto first bought into the Chicago Fire nearly three years ago, the clubs time as one of the top organizations in MLS had long since passed. Im pessimistic about the next media deal, said the owner. For the first time since various publications started attempting to place valuations on MLS teams, the Seattle Sounders saw a decline. The structure of the league itself gives MLS owners a level of security uncommon in professional sports. That figure tracks with the, reported D.C. United received from SUM in 2016. . MLS currently nets $90 million per year from its current media rights agreement with American broadcasters ESPN, FOX Sports and Univision. Given the history of MLS, its probably not unlikely, either. [10], Rankings as of February 2, 2023 (2022 Major League Soccer season). The club has built an incredible brand and fed off its Pacific Northwest rivalry with the Sounders. That potential is the most important justification for the leagues growing valuations. Nine years ago, the club joined the league for a mere $110 million expansion fee and was only worth $475 million in 2019. Although our valuation suggests Mansueto has already come out aheadbetween the two investment rounds, he secured full ownership at a total cost of $322 millionthe purchase is the latest example of MLS owners looking far to the future to justify todays exorbitant investments in the league. Neither of those fees are even a third of the maximum Tepper could end up paying to bring Charlotte into the league. Houston Dynamo FC were sold in June, and the Orlando City SC sale process should wrap this month. We want to hear from you! Billionaire Joe Mansueto has begun building an empire in his adopted hometown of Chicago. For now, the two leagues are feeling each other out. The challenge for MLS is to build upon its tremendous growth and development of the past decade by levering its advantage as the top U.S. domestic soccer league to gain share against other soccer leagues. 2 min read. The club has never ranked outside the top six in average home-game attendance, and it generates a league-high $5.5 million from local media rights. [3] The fastest growing MLS franchise is the Columbus Crew with a 175% increase in valuation since the 2018 Major League Soccer season ($0.2 to $0.55 billion). I think live sports content is going to be a great investment going forward, said Mansueto. Theres little doubt that the tournament itself will generate huge interest, crowds and television audiences in the U.S. and Canada, but there are no guarantees that an, y of that will actually carry over to MLS. It allows you to draft off of their massive following and migrate some of those Liga MX viewers to MLS. In addition, Cohen sees other paths for MLS to increase the value of rights fee values through retaining homegrown stars, attracting international stars, broadcast innovations and format/scheduling tweaks. But I think people love it. The deep ownership roster of LAFC has played a crucial role in the teams meteoric rise to be MLSs most valuable club in only its fourth season as a franchise, but it is not the celebrities team co-president Larry Freedman typically leans on when faced with an operations issue. MLS has the security.. Its a very simple thing where Don (Garber) says, Look, the league itself was founded out of the remnants of 1994, said the owner. Learn more about how Statista can support your business. Its ratings are small and relatively stagnant. LAFC has sold out every MLS regular season and playoff match since its first kickoff in 2018. , the long history of individual MLS clubs losing money annually doesnt really matter all that much. Forbes. Please do not hesitate to contact me. The fact that a decent number of clubs have made real inroads in their communities is good evidence for the league. The talent pool has always been the drawback for MLS, as the league barely cracks the top 20 leagues in global football by most rankings. In July, NBA star James Harden invested $15 million for a small stake of the Houston Dynamo, a deal that valued the club and its stadium at $425 million (the Forbes valuations listed below are only for the teams, excluding stadiums and real estate). Garber spoke to that dynamic in a recent panel discussion held by the Financial Times, calling MLS the league for the new North America and pointing to the exploding Hispanic community in the U.S. and broad interest in soccer from young people as offering a long-term opportunity for MLS. If theres even a small chance that MLS could become a top league in the world at some point, the potential return associated with that would be enticing., Part of the reason for increasing MLS team valuations in recent years is expansion. Its one of the last things that keeps the cord-cutters tethered to their cable subscriptions, its ESPN and live sports. The clubs annual corporate sponsorships should rank among the top five in MLS this year, and the paid season-ticket waitlist tops 25,000 seats. Throughout its existence, MLS has been careful to proceed slowly and steadily. Like a masterpiece painting, a team is a unique, scarce good. In addition to negotiating sponsorship and television deals for MLS, SUM handles commercial rights for the U.S. Soccer Federation, Concacaf and the Mexican national teams U.S. tours, among otherproperties. MLS is a growth company, he told The Athletic. A billion dollars is a huge number. Austin will serve as the only MLS team to operate as the lone major league property in its respective market, and the metro area was the largest in North America without a major pro sports team before the soccer teams arrival. That potential is the most important justification for the leagues growing valuations. The club president who spoke laid it out like this: Once the world emerges from the pandemic, MLS valuations should continue to grow rapidly until the 2026 World Cup. Most Super Bowl wins by NFL team 1967-2023, Average ticket price in the NFL by team 2021, FIFA World Ranking: top male soccer teams 2022, Athletic footwear global market share by company 2015, Health & Fitness Clubs - Statistics & Facts, Sporting goods industry in the U.S. - statistics & facts, Profit from additional features with an Employee Account. Real estate is also a big part of the equation. He knows the league, its owners and its executives, and is familiar with the financial fundamentals of its clubs. The Fires bottom-line wasnt any better. Profit from the additional features of your individual account. , is in discussions to be sold for around $450 million just seven years after it was founded. Outside of adding new teams, MLSs growth thesis rests on a few different factors. To say the Blue & Orange struggled on the field would be an incredible understatementthe team won just six games all yearbut that performance didnt stop fans from turning out in droves. Show publisher information La Liga powerhouse FC Barcelona alone reported $1.1 billion in revenue during its 2018-19 campaign. Expansion fees are distributed among other owners and effectively set a floor for other MLS valuations. Furthermore, he noticed . Language links are at the top of the page across from the title. Low viewership, coupled with financial issues some broadcasters are facing due to the pandemic, has led many around MLS to temper their expectations for the upcoming media rights deal. Naturally, that leads to the inevitable subsequent phase of draft analysis - parsing, evaluating . That may start looking like a very smart bet in 2026, when the World Cup returns to the United States for the first time since the 1994 edition that fueled the launch of MLS. Any of the above scenarios could end up coming true. Please create an employee account to be able to mark statistics as favorites. In the meantime, the league is starting to tap into a different revenue stream: Transfers. MLS clubs also share revenue. 2, $480 million) and LAFC (No. Considering the unpopularity of MLS compared to those other leagues and the fact that most ever. I dont think were going to get a media deal thats going to be what everybody dreams of.. The Union sold a pair of players over the last nine months that came through its academy program. A large number of wealthy Americans want to own a U.S. sports franchise, but franchise values (in mens leagues) have grown to the point of being cost prohibitive for most, said Swoboda. Thats a payment of more than $70 million for just 10 percent of the club. The enthusiasm for 1994 was enough to get the league started and the league has now been going for 25, ears, and were expecting a similar step function, a similar step up in terms of fans, in terms of excitement for the sport, in terms of the value of the clubs, in terms of the media deal around 2026., Expecting the World Cup to transform the league to that degree is a massive assumption. By the time the first home game in franchise history arrived last month at freshly christened Q2 Stadium, Austin was already a winner. Real progress is starting to be made. The average 2019 valuation for MLS teams would be big enough to acquire all but the absolute biggest clubs in Europe. The Galaxy have been the MLS model of success since the leagues founding in 1994. A good amount of that growth, it is assumed, will be on the back of the 2026 World Cup. The three other North American mens pro leagues the NFL, NBA and MLB are in a different universe with their media rights deals, each earning more than a billion dollars per year from their national broadcast partners. If youre a billionaire and youre paying $6 or $7 million a year in losses, thats something you can handle.. I think you could say, You know what, the World Cup is kind of its own thing. It was a little bit more of an oddity back in the 90s when no one here knew what soccer was, but now Messi and Ronaldo and Neymar, these people are household names in the U.S. And so whether or not its going to float all the boats of all the MLS teams is not as much of a slam dunk as a lot of people think. Thats more than double the $475 million Forbes determined it was worth in 2019, the last time we assessed North American soccer teams. And in 2026, soccer should get another big boost when the United States, Canada and Mexico cohost the next World Cup. This is a BETA experience. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. So, what are you going to do with your money? The leagues single-entity structure provides owners with a stable floor and a number of other factors give MLS a high ceiling, but the fact remains that the massive growth in club valuations has been driven more by expansion and potential than the leagues current financial reality or level of popularity. He isnt the only billionaire thinking that way. [Online]. LAFC, on the other hand, only just completed their second MLS season but already rank among the league leaders in stadium naming rights and jersey sponsor revenues, reportedly worth annual payments of $6.7 million and nearly $6 million, respectively. With a massive TV contract, MLS teams could in theory become billion-dollar assets. The league has long instructed clubs to not sign any local broadcast agreements beyond the 2022 season, giving MLS maximum flexibility in how it wants to package its national rights. Investors are looking at a long-term horizon on the premise that the U.S. has joined the rest of the world and embraced a love for the game, highlighted by the U.S. hosting the World Cup in 2026.. 3, $475 million). Their clubs are run well and, according to Forbes, typically operate around the break-even point. Because then a large set of owners will continue to enforce a lid on spending.. Its average attendance of 21,358 from 2013-2018 ranked eighth in the world among all soccer leagues in that period, narrowly behind Italys Serie A and Frances Ligue 1. The proliferation of soccer on television means we can all turn on our TV or over-the-top services on Saturday morning and watch six different games of some of the best soccer in the world, said the owner. Sportico is a part of Penske Media Corporation. The league enjoyed solid attendance in 1996 off the back of the 1994 World Cup, but that dropped off significantly in subsequent seasons. [2], The latest ranking reported that Los Angeles FC is the most valuable MLS franchise after the 2022 Major League Soccer season. Shortly before he took full ownership, Mansueto and Hauptmancompleted a deal to buy the Fire out of its stadium lease in Bridgeview. With those sorts of dreams in play, its no wonder that Mansueto isnt alone in paying up for a piece of the action. But assume youre buying into a club that is in a league that is not at the pinnacle of its sport, for which there is so much money and attention in that sport globally. At this point, MLS isnt that not when it comes to television, at least. It creates a virtuous cycle where stronger talent creates valueeither on the field or in the transfer marketand spurs increased revenue and interest on the fan and corporate side, allowing teams to afford better talent. Three others play in or will play in multi-sport facilities that were designed or are being retrofitted with the idea of hosting soccer in mind. That kind of ecosystem has allowed some clubs to turn into global powers in a wa, y all but unimaginable for an MLS team, but it has led others to become, over-leveraged, which can lead to disaster. The latest ranking reported that the New York Yankees is the most . [5], Several media outlets have referenced in related news or conducts analytic journalism when the ranking comes out, such as The Cincinnati Enquirer and American City Business Journals. Cincinnati's average home-game attendance was more than 27,000 per game, third-most of any MLS team, behind Atlanta and the Seattle Sounders (the league's fourth-most valuable team, worth $405 . So it makes some sense that MLS owners would invest big in a money-losing enterprise, given that theyre also securing a long-term interest in the continued success of soccer in the North America. Understandably, MLS is interested in glomming onto that audience, capturing some of those fans and creating interleague competitions that it can sell to broadcast networks. Everythings a gamble, Rosenthal says. Forbes estimated that the company distributed $125 million to league owners in 2018, or roughly $5 million per club. Forbes just released its rankings of the most valuable MLS teams for 2019 and the Sounders finished fourth with a value of $405 million. The outlets assessments are usually in the ballpark, however, and maintain a certain level of cachet in the sports world. Trapped in an onerous stadium deal in hard-to-reach Bridgeview, Ill., Chicago ranked 15th out of 23 teams in revenue and lost more money than all but one other club in MLS in 2018. The capital contribution for expansion and the protection of the capital contribution is essential to what peaks values.. According to Forbes, the 23 teams that played in MLS during 2018 combined for $100 million in losses. Forbes did not release a valuation report for MLS teams in 2020. [8][9] The report has also applied more context to MLS trends, such as the decrease in valuation in relationship with the decrease in attendance for Chicago Fire FC. If theres even a small chance that MLS could become a top league in the world at some point, the potential return associated with that would be enticing.. Greg Careys client list could double as a directory of some of the highest-profile teams in the world. The two knew each other well from the private equity world and had together invested in Italian soccer club A.S. Roma. And the price tag for the next expansion team (likely Las Vegas or San Diego) is expected to be $500 million, according to a well-placed industry source, a considerable increase from the previous record of $325 million set by billionaire David Tepper when he founded Charlotte FC in 2019. If anything, I think the valuations are excessively conservative.. Barring a significant increase in spending before and after that tournament, the league ma. The Los Angeles rivalry between the Galaxy and LAFC may already be the most heated rivalry in MLS. Big market teams dominate the top of our valuations table with Atlanta United ($845 million), L.A. Galaxy ($835 million), Seattle Sounders FC ($705 million), NYC FC ($655 million) and Toronto FC ($650 million) falling in behind LAFC. The Fires bottom-line wasnt any better. Some of the recent additions to the league teams like Atlanta and LAFC, to name two have proven that a more ambitious approach can drive success on and off the field, but most clubs havent yet adopted the same aggressive strategies. Thats a payment of more than $70 million for just 10 percent of the club. The two clubs have a symbiotic relationship fueling sponsorship and ticketing opportunities for both teams. That figure is set to rise in 2023, with BMO agreeing to a league-record 10-year, $100 million stadium naming rights deal. In fact, although revenues are broadly on the rise, the league and most of its teams continue to operate at a significant loss. It even sent fans to a match in Germany to study European fan culture. The individuals paying hundreds of millions to get into the league arent just buying a club, theyre buying the possibility for growth. Those two clubs paid $70 million and $100 million, respectively, for their expansion slots. you cant spend on players, said the aforementioned owner. Forbes' annual MLS team valuations were released on the eve of MLS Cup 2019, and for the second consecutive season, Atlanta United top the list. Similar to the NWSLs attempts to build itself on the success of the U.S. womens national team, MLS will need to position itself smartly and probably spend significantly more money on players in order to fully capitalize on the wave of domestic interest in the sport that should come with the competition. MLS might not shoot the moon in its next broadcast agreement, but, considering sports media rights are ballooning all over the world, the league is betting that it will eventuall, I think live sports content is going to be a great investment going forward, said Mansueto. But its a really smart bet.. Expecting the World Cup to transform the league to that degree is a massive assumption. The leagues single-entity setup owners technically buy a stake in the league, then are given rights to run a particular club; the league pays most player salaries means the floor for any one MLS club is relatively defined. 5 teams are not over $3 billion (NYY, LAD, BOS, CHC, SF) Texas Rangers valuation increased the most year-over-year at 15%. To rank the most valuable Major League Soccer franchises, Forbes examined recent transaction data, reviewed publicly available financial information and spoke to more than 40 team executives . Garber spoke to that d. ynamic in a recent panel discussion held by the Financial Times, calling MLS the league for the new North America and pointing to the exploding Hispanic communit. If you are an admin, please authenticate by logging in again. For now, the two leagues are feeling each other out. The return comes in the form of a capital gain when its sold. Mansueto has pledged to explore constructing a soccer-specific stadium and to build a training facility in Chicago, . That fact no doubt helped MLS goose more value out of the deal, and its expected that the relationship will continue when the league negotiates a new deal for the 2023 season. Below are the values of the league's 28 franchises, which are collectively worth $16.3 billion. All Rights Reserved. The pandemic largel, y kept fans away from matches in 2020, but MLS has established itself as a well-attended league over the last five-to-10, ears. With a massive TV contract, MLS teams could in theory become billion-dollar assets. Its also setting a new standard for attracting cashflow from Europes top leagues: In January, Atlanta sold star midfielder Miguel Almirn to the Premier Leagues Newcastle United for an MLS-record $27 million transfer fee. The new agreement will all stay with MLS now, and the league has boosted the value of the package by including increased international rights and local rights, both broadcast and streaming (MLS clubs were prohibited from signing local deals past 2022). Soccer in the United States is still in the growth stage, compared to many of the leagues both domestically and abroad, said Inner Circle Sports co-founder Steve Horowitz, who has been the investment banker on numerous MLS transactions. It should be noted that the Forbes numbers are merely an estimation ultimately, a clubs value is simply what someone is willing to pay for it. (Manchester United, by contrast, is valued at $4.6 billion, or 6.9 times revenue.) Collectively, the fair-market value of the 27 current MLS franchises, including team-related businesses and real estate held by owners, is $14.9 billion. But the lack of relegation and cost certainty through the leagues centralized model prevents clubs from piling up the huge operating losses that exist in many corners of European soccer. If the expansion club can maintain that level of fan support, it will have the opportunity to greatly increase revenues when it moves to its $200 million West End Stadium in 2021. Its less of a financial hurdle to control an MLS team than [in] some other sports, so you do see more people who can do it, says Rosenthal, who is worth an estimated $1.3 billion. . Sportico released its 2021 MLS team valuations last week, and Los Angeles FC topped the list with an estimated worth of $860 million, around 10 times 2019 revenues. Both pale in comparison, though, with the sum he paid for the citys Major League Soccer team: In September, the Morningstar founder acquired 100% ownership of the Chicago Fire at a $400 million valuation. Here are a few notable items: New York Yankees are the first MLB team to surpass $6 billion. This site is protected by reCAPTCHA Enterprise and the Google. Mississippi State cornerback Emmanuel Forbes, their first-round pick, can be a starter in . Yet, recent transactions indicate a league on fire, with teams selling at frothy multiples reminiscent of a late 1990s tech stock. That on-field success has translated to a massive swell of fan support. MLS might not shoot the moon in its next broadcast agreement, but, considering sports media rights are ballooning all over the world, the league is betting that it will eventually land a massive deal.