Wholly owned and operated by the league, SUM is a particularly attractive element of buying into MLS. That potential is the most important justification for the leagues growing valuations. Sportico talked to more than 60 stakeholders inside and outside MLS over the last five weeks to dig into the financial metrics and team valuations of a league that has long relied on expansion fees to prop up its franchises but is now ready to turn off the expansion spigot and walk on its own two feet with soccer-specific stadiums in most markets; expanded youth academies; a new TV deal on the horizon; interest in the womens game surging; and the World Cup on its way. Because then a large set of owners will continue to enforce a lid on spending.. The rights package shifted when U.S. Soccer pulled its rights in May from Soccer United Marketing (SUM), which previously inked combined media deals for the two entities. 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. It seems, however, that the most reasonable projection is somewhere in the middle. These areas are supported by applying financial metrics such as debt and operating income to each one.. As an asset, it will probably appreciate over time, but there are still many more certain ways for the extremely wealthy to make money. Major League Soccer's Most Valuable Teams 2015 - Forbes If you are an admin, please authenticate by logging in again. Unlike in most of the rest of the world, there is no risk of relegation in MLS no possibility of a few injuries derailing a season so badly that a club drops a division and takes a massive hit in revenue as a result. And although most teams may struggle to break even, there is a glimmer of hope offered by the leagues elite franchises, which are already showing that an uber-successful MLS team can be a license to print money. That convergence serves as the backbone for a general belief among. (February 2, 2023). An inside look at why billionaires buy into money-losing Major League You may opt-out by. It wouldnt be enough to buy a team in the NFL, NBA or MLB and would only scrape the lower end of the NHL, but, as a multiple of annual revenue, MLS teams are trading at much higher values than teams even in the other North American leagues. He isnt the only billionaire thinking that way. 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. Expansion fees are distributed among other owners and effectively set a floor for other MLS valuations. United States League level: First Tier Reigning champion: Los Angeles FC Record-holding champions: Los Angeles Galaxy 5 time (s) 1.18 bn. Outside of adding new teams, MLSs growth thesis rests on a few different factors. Barely a year later, Mansueto took full control, buying Hauptmans remaining 51 percent stake at a valuation of $400 million, a dramatic increase from the $240 million valuation at which he bought in just 14 months earlier. MLS took over the sales process in January, and most insiders think the club will fetch at least $400 million. "Most Valuable Major League Soccer (Mls) Teams in 2023 (in Million U.S. Hes also worked with 11 MLS teams, primarily on stadium deals. That didnt stop Mansueto from paying a fortune for a stake in the club. It. y for those that struggle to put butts in seats. Greg Careys client list could double as a directory of some of the highest-profile teams in the world. yers, the academies, you look at what teams like Philadelphia and Dallas have done, theyre starting to make money in the transfer market, added Carey. The average MLS team is now worth $313 million, up 30% from last year. Put simply, Major League Soccers surging expansion fees and sales prices are not being driven by financial performance. Below are the elements that compose the value of the league's 27 franchises, which are collectively worth $14.8 billion. With the World Cup in the rearview, the league will have less of a leg to stand on in terms of selling its overall potential for growth, but that narrative wont go away entirely. . Swoboda, managing director of the Americas for 21st Club, a sports intelligence firm that advises teams in Europe and North America and has experience helping individuals buy clubs on both sides of the Atlantic. With those sorts of dreams in play, its no wonder that Mansueto isnt alone in paying up for a piece of the action. For the first two decades of its existence, MLS basically worked against selling players. The return comes in the form of a capital gain when its sold. 3, $475 million). in at higher price points like Mansueto and Tepper. Forbes has estimated that SUM generates annual revenues of some $350 million, and its profitable, too; last year the property distributed $125 million to league owners. Business Solutions including all features. Thats more potential broadcast partners than existed when the league negotiated its last deal back in 2014. The 24 MLS teams in existence during the 2019 season produced $1.1 billion in revenue, including distributions from the league (2020 was an estimated $468 million for 26 teams). Today, all four call America's Major League Soccer home . But the near-term bleeding hasnt slowed the rise of MLS team values, since owners are instead making a growth bet on the leaguesand the sportsfuture. And for the period that they do own the team or if they never sell investors are on a pretty fun ride. 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. The increase would boost the fortunes of low revenue clubs and have a more muted impact on teams with significant gate and sponsorship revenue. As long as the league continues to expand and there are likely a minimum of three spots still available there is ample incentive for MLS not to sell any club for less than the most recent expansion fee. Forbes' list of the most valuable sports teams, List of professional sports leagues by revenue, "Major League Soccer's Most Valuable Teams 2019: Atlanta Stays On Top As Expansion Fees, Sale Prices Surge", "Major League Soccer's Most Valuable Clubs 2023: LAFC Is The First Billion-Dollar Franchise", "Save The Crew: How A Seemingly Impossible Mission Now Seems Very Possible For The Columbus Crew", "LAFC value hits 1 billion dollars, but who's buying? As long as the league continues to expand and there are, likely a minimum of three spots still available. The transfer window, the trading of players, the academies, you look at what teams like Philadelphia and Dallas have done, theyre starting to make money in the transfer market, added Carey. . 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. 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. Forbes. MLS currently nets $90 million per year from its current media rights agreement with American broadcasters ESPN, FOX Sports and Univision. Financial data taken from the 2023 and 2019 Forbes valuations articles. 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. He'll need an impressive summer to enter the defensive end . 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, according to Forbes. Fans of the sport of soccer skew younger and more diverse than American fans of other sports, too. Try a week on us. Houston Dynamo FC were sold in June, and the Orlando City SC sale process should wrap this month. The future for MLS investors is predicated on how much soccer continues to grow in North America, with hopes pinned on a new annual tournament between MLS and Mexicos Liga MX kicking off in 2023. There are now 29 teams in the leagueit began with 10with St. Louis City SC set to debut this season. 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.". Per the arrangement, MLS is guaranteed at least $2.5 billion over 10 years, and possibly more based on subscriptions. Billionaire Joe Mansueto has begun building an empire in his adopted hometown of Chicago. league; the club ranks among the top 20 global soccer teams in average home game attendance. San Francisco 49ers Raise Eyebrows While Addressing Needs In NFL Draft. MLS has instructed its teams not to tie up their media rights beyond that expiration date, giving the league a chance to take its full inventory to market. 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. In late 2018, he paid $106 million for the Belden-Stratford apartment building. Several have completed eye-popping MLS deals in recent years, with one of the more notable transactions coming just a few months after Mansueto gained full control in Chicago. Many NWSL teams are still finding their footing on the business side, but the Thorns are driving significant revenue from 11,000 season ticket holders and sponsorships, while TV ratings are also strong. Theres a lot of absurdly rich people in the United States, said the owner. Most valuable Major League Soccer (MLS) teams in 2023 (in million U.S. dollars) [Graph]. The days of Bob Bradley roaming the sidelines and Peter Nowak, Chris Armas and Cuauhtmoc Blanco starring in front of sizable support were firmly in the rearview, replaced by small crowds and an ever-changing roster that almost always missed the playoffs. At the Los Angeles Football Clubs University Hills training facility, some 10 weeks after winning its first Major League Soccer title in a thrilling penalty shootout, lead managing owner Bennett Rosenthal is still processing his teams spectacular season. The MLS story has often been framed as looking to the next TV deal or next big event, but many in the worlds largest economy are betting that time has come, including several billionaire NFL ownersDavid Tepper, the Wilf family, and Dee and Jimmy Haslamwho have all purchased teams over the past three years. The ideal entry-level account for individual users. 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. The new deal, youre probably only going to see incremental growth, said Carey. I think if the NHL does well, theyll just grow at the rate of the rest of the economy. Those extras help explain the lofty enterprise values of LAFC, which owns its stadium, and Orlando, which owns its stadium and has an NWSL team, the Orlando Pride. [4] Los Angeles FC became the new team for highest valuation after Atlanta United FC was number one in 2019. And there is a massive event on the horizon that could serve as a once-in-a-generation vehicle to supercharge that growth: The 2026 World Cup that will be co-hosted b, y the U.S., Canada and Mexico. Sportico is a part of Penske Media Corporation. The collective bargaining saga with the leagues players that unfolded over the last year is evidence of that. Those arent the sorts of prices a sports banker would arrive at given the financial performance of a typical MLS team. The World Cup is far from the only angle the league can work to increase overall interest, though. The Seattle Mariners Are Winning. 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.. The Philadelphia Union, which ranks 13th with a value of $530 million, has one of the strongest academies of any MLS squad. 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. There are a number of networks that could end up in the mix for the next round of MLS rights. Learn more about how Statista can support your business. [1]These areas are supported by applying financial metrics such as revenue and operating income to each one. Even the worst stragglers in the league rarely have an operating loss of more than $10 million in a normal, non-pandemic season, according to Forbes. By the time the first home game in franchise history arrived last month at freshly christened Q2 Stadium, Austin was already a winner. Expecting the World Cup to transform the league to that degree is a massive assumption.
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