It’s nigh impossible to get figures out of Major League Soccer on which teams are earning a profit and which are not. All thanks then to Forbes Magazine for an independent review of the league’s finances. On the whole it presents an optimistic picture of a burgeoning league, especially for those teams with a home of their own, and raises the question why MLS is so secretive about its numbers.
Several teams are gaining in value, and three now post an operating profit — the L.A. Galaxy (now worth an estimated $100 million), Toronto FC (“the blueprint for the coming expansion teams,” according to league Commissioner Don Garber. Forbes estimates its worth $44 million after it turned a $2.1 million profit in its inaugural season) and FC Dallas. Combined, these teams had an operating profit of $6.7 million last year.
Also, Philip Anschutz sold a 50 per cent stake in the Houston Dynamo earlier this year that valued the team at $45 million, and the cost of buying an MLS franchise is rising every year. Toronto paid $10 million in 2005, Seattle and Philadelphia recently paid $30 million, the next two teams will cost $40 million, and “some team owners are even floating a $50 million price tag.”
On the down side, the league is still in the red, with its 13 teams (not including San Jose) losing an estimated $20 million in 2007 on revenues of $165 million. The Kansas City Wizards, New England Revolution, and Chivas USA are all struggling financially for lack of their own stadium and a shortfall in fans, sponsorship and local TV revenues. The latter factors apply to the Columbus Crew, despite the team having its own stadium. But the prospects look much rosier for Real Salt Lake and RB New York, moving into their own stadiums in 2008 and 2009, respectively.
And the income from national TV deals? Soccer United Marketing takes that money ($23 million last season) and is a separate business owned by investors in the league. It “distributed less than $1 million to each team last season,” says Forbes. “That means that to be successful in MLS, a team has to generate a lot of cash from its stadium and local television and sponsorship deals.”