Even though some teams continue to lose money, MLS franchise value continues to grow as the league nears future watershed moments. One of the league’s clubs sits amongst the world elite in match attendance, others either have or are soon moving into their own soccer-specific stadiums, and more teams are beginning to make money alongside owners who are investing heavily in the future the sport, their club and Major League Soccer itself.
MLS Club Valuations – 2019
Forbes recently came out with its 2019 valuations for each of Major League Soccer’s 24 teams. There are interesting insights to glean from these estimations that paint a mostly bright future for the league.
At first, you may be asking how numbers like this can seem favorable. However, even with the losses, the investment in the league continues to rise. Moreover, according to Nielsen Sports Sponsorlink, the league has experienced a 27% rise in interest since 2012. It’s numbers like these that have current and future club owners bullish about the future of the league itself.
You Have To Spend Money To Make Money
Cincinnati and Nashville both paid $150 million for their place in MLS just a few years ago while St. Louis and Sacramento will pay a $200 million expansion fee. The 30th spot in the league is expected to cost around $300 million, a far cry from the $10 million Toronto FC spent in 2007. But where are owners seeing the future value? Two answers: national TV rights deal in 2022 and the FIFA World Cup in 2026. Currently, ESPN, Fox Sports and Univision pay around $90 million per season to broadcast Major League Soccer. This will pale in comparison to the future deal in 2022. So much so, that MLS is making sure its clubs do not secure local broadcast deals that surpass 2022. The 2026 FIFA World Cup will be its own culture shift for the sport in the United States. We wrote at length about the value of that particular tournament when the bid was awarded in 2018.
A Future To Be Excited About
When looking at growth amongst other professional sports leagues in America, the average club value is growing at a higher rate than NBA (13%), NFL (11%), MLB (8%) and NHL (6%). So yes, 17 teams in MLS lost money in 2018, but that won’t stop MLS franchise values from growing as a new broadcast deal and the 2026 FIFA World Cup get closer. At first glance, the numbers presented by Forbes may seem startling, but as one begins to dig just a bit deeper you begin to see why MLS is here to stay.
Categories: Finances, Major League Soccer