Soccerstoriesbook's Blog


FOR WHAT THEY’RE WORTH: $157 MILLION PER MLS TEAM

The average worth of Major League Soccer clubs reached $157 million in 2014, up 52 percent from the previous year, according to a valuation by Forbes magazine.

Topping the list were the Seattle Sounders at $245 million, while the Colorado Rapids, worth $105 million, brought up the rear.  The biggest mover was DC United, whose value increased 97 percent, from $71 million in ’13 to $140 million last year.  Average team worth was $103 million in 2013, nearly triple what Forbes valued the teams five years earlier.

Eight of MLS’ then-18 clubs turned a profit in 2014, led by Seattle’s $10 million.  The biggest loser was the New York Red Bulls at $9 million.

2014 valuation of MLS clubs, plus revenue and operating income*:

1.  Seattle Sounders — $245 million, $50 million, $10 million.

2.  Los Angeles Galaxy — $240 million, $44 million, $4 million.

3.  Houston Dynamo — $200 million, $26 million, $5 million.

4.  Portland Timbers — $185 million, $35 million, $4 million.

5.  Toronto FC — $175 million, $32 million, -$7 million.

6.  Sporting Kansas City — $165 million, $29 million, $4 million.

7.  Chicago Fire — $160 million, $21 million, -$6 million.

8.  New England Revolution — $158 million, $25 million, $7 million.

9.  FC Dallas — $148 million, $25 million, -$3 million.

10.  San Jose Earthquakes — $146 million, $13 million, -$1 million.

11.  Philadelphia Union — $145 million, $25 million, $2 million.

12.  New York Red Bulls — $144 million, $22 million, -$9 million.

13.  D.C. United — $140 million, $21 million, -$1 million.

14.  Montreal Impact — $128 million, $22 million, -$3 million.

15.  Vancouver Whitecaps — $125 million, $21 million, -$6 million.

16.  Columbus Crew — $112 million, $18 million, -$4 million.

17.  Real Salt Lake — $108 million, $17 million, $1 million.

18.  Colorado Rapids — $105 million, $15 million, -$3 million.

*Operating income before interest, taxes, depreciation, amortization.

Forbes cited a number of reasons for the league’s surging team valuation, including:

o  Growing attendance, which through July averaged 21,000, as MLS continued to widen the gap with the NBA (17,800) and NHL (17,500) in that department.  That average projects to total attendance of 7.2 million in 2015, thanks in part to the addition of new teams in New York and Orlando.   The 2013 total was 6 million.

o  An influx of overseas talent that picked up in 2015 with the arrival of the likes of Kaka, Andrea Pirlo, Steven Gerrard, Frank Lampard, David Villa and Didier Drogba–a clear indication that owners are willing to spend to enhance the product on the field.

o  More soccer-specific stadiums throughout MLS.  The latest was San Jose’s Avaya Stadium, which opened in March, and DC United plans be in new digs by 2018.  Like United, the Earthquakes’ value has doubled since ’13.

o  The end of a TV deal with ESPN, NBC and Univision that paid MLS an average $30 million per year.  The new deal, in which Fox replaced NBC, pays $90 million a year.  Hardly NFL figures, or even NHL figures, and average viewship of 232,000 this year on Fox Sports 1 trails even the WNBA, but that represents a 65 percent improvement over NBCSN’s average audience of 141,000.  [September 19]

Comment I:  Total team worth of more than $2.8 billion for a league that as recently as 2002 nearly went under.  No wonder there were no signs of panic when MLS Commissioner Don Garber, during his “State of the League” address in December, revealed that the league was losing more than $100 million a year.

Comment II:  Being part of MLS is still far from being a license to print money, but no wonder the owners of LAFC, which won’t begin play until 2018, paid a league-record expansion fee of $110 million to try to succeed where it predecessor, the ill-fated Chivas USA, failed.  By comparison, the Miami Fusion, one of the league’s first two expansion teams, paid $20 million in 1997 to join MLS.

 

 

 



ADIOS, CHIVAS USA

Major League Soccer has purchased the troubled Chivas USA from Jorge Vergara and Angelica Fuentes and will operate the team until an owner is found who will build a new stadium for it in the Los Angeles area.

Sale price was a reported $70 million.  The original bill Vergara, wife Fuentes, and Antonio and Lorenzo Cue paid MLS to create Chivas USA 10 years ago was $10 million; Vergara and Fuentes bought out the Cues 15 months ago for $40 million.

New owners figure to re-brand the team with a new name and logo.

“Certainly, it hasn’t worked out as well as anybody expected,” said MLS Commissioner Don Garber.  “I don’t think this is the fault of ownership, per se.  There’s a lot of issues that we, the league, take responsibility for.  Now we are just very focused on a new beginning.”

Chivas USA will begin its 2014 season next month under new coach Wilmer Cabrera, the club’s 11th field boss, a list that includes Thomas Rongen, Preki, future U.S. National Team coach Bob Bradley and current national team assistant Martin Vasquez.  Chivas’ best season was its third, when it topped the Western Conference with a 15-7-8 record but fell in the conference semifinals.

In 2013, the Goats finished last in the West at 6-20-8, the second-worst mark in the 19-team league.  Its attendance for 17 regular-season games at the Stub Hub Center was an abysmal 8,366, a nearly 36 percent drop in the gate from 2012.  That was the worst in MLS, which averaged 18,608, the second best in league history.  No other MLS club was below five figures in average attendance.  Chivas’ co-tenant at Stub Hub, the Los Angeles Galaxy, averaged 22,152, a drop of 4.25 percent in its first David Beckham-less campaign in seven years.  The Seattle Sounders led all at 44,038 a match.  [February 20]

Comment:  About time, and farewell to a failed experiment and a drag on Major League Soccer.

Despite its good intentions to lure Southern California’s thousands and thousands of transplants from Jalisco state, Chivas USA was neither Chivas nor USA.  Or maybe it was too USA to be a second Chivas–the 2014 roster shows 18 Americans and just two Mexicans, one fewer than the number of Argentines on the list.

It all looked good on paper, but league rules prevented Chivas USA from fielding the predominantly Mexican side ownership sought, and it was all downhill from there.  This secondary version of Chivas Guadalajara quickly became an afterthought and a team damned to stand in the shadow of the older and much more successful Galaxy.

Although the league’s efforts to get to this point were months in the making, it was long overdue nonetheless.  Garber adds expansion teams to MLS like a desperately spawning salmon, while he should have been devoting his attention to this weak sister.  The concept of a two-team rivalry in a major market remains an enticing concept.  MLS will add New York City FC and Orlando SC in 2015, swelling its ranks to an unwieldy 21 teams.  It will be interesting to see if New York Red Bulls versus the new NYCFC ignites local passion.  In the meantime, MLS is left with the lesson out of Los Angeles that it takes two to make a rivalry.



DON GARBER AS SOCCER’S ICARUS

Major League Soccer will expand to 24 teams by 2020.

League Commissioner Don Garber made that announcement during a TV interview at halftime of his league’s all-star game in Kansas City.  It comes on the heels of the addition of New York City FC for the 2015 season, which was believed to cap the number of MLS teams at 20.  The goal of two dozen teams opens the door for hopefuls such as Orlando, Detroit, Atlanta, Sacramento, Oklahoma City and Minneapolis, whose representatives have been trying to woo MLS in recent months.

“As MLS enters a period of accelerated growth, the addition of new teams will allow us to expand our geographic coverage, grow our fan base and help us achieve our vision of being among the best leagues in the world by 2022,” said Garber.  [July 31]

Comment:  Sheer folly.

Without promotion/relegation–and there will never be promotion/relegation involving MLS–even the idea of 20 teams, let alone 24, is ridiculous.

Twenty-four teams would make MLS the world’s biggest top-flight soccer circuit.  Impressive distinction.  But there are reasons why leagues with pro/rel in soccer-mad countries–the Italian Serie A, Spain’s La Liga, the English Premier League, the German Bundesliga 1, the Brasileiro Serie A, etc.–limit membership to 18 or 20 clubs.

Never mind the questionable potential or track records of the possible MLS markets being discussed.  Just go with the numbers.  Twenty-four teams? That means that if each team magically takes turns winning an MLS Cup, the fans in an exemplary market like Portland, where the Timbers are on a 45-game home sellout streak, will have to wait more than a generation between league championships.  Throw in a mini-dynasty by a team from a glamorous market like (gulp)  Oklahoma City or Sacramento and the wait is even longer.  Meanwhile, without promotion/relegation, troubled teams like Chivas USA and Toronto FC, with 10 or more opponents ahead of them in the conference standings, can continue to stink up the bottom of the league into perpetuity while their dwindling, hopeless fan bases look on.

So how does Garber adequately cover two enormous countries while keeping fans of losing teams engaged?  He can’t continue to expand the playoffs–he already throws around playoff berths like penny candy.  He should leave things, then, at an already bloated 20.  And if he must restore MLS’s presence in the Deep South, he should convince the league’s biggest problem child, Chivas USA, to arrange a move to Atlanta or even Orlando (even though Florida has proven to be the black hole of pro soccer over the past three decades).  Moving a team may be seen as a sign of weakness, but it’s the magic formula used for ages by Major League Baseball, the NFL, NBA and NHL whenever there’s a need to leverage a new stadium or favorable ownership change–or simply scare former fans into showing up again.

It is hoped that Garber and the MLS Board of Governors come to the realization that their league doesn’t have to be anywhere close to the NFL (32 teams), Major League Baseball (30), the NBA (30) or the NHL (30) in membership to be considered major league.  Heck, the NHL was considered major league back in the mid-1960s when it had six teams; it earned that distinction by presenting a major league product.  But if Garber is hell-bent on expanding to two dozen teams, he should have one last look at the U.S. soccer history books.  The last soccer league here to grow to 24 was another without promotion/relegation, the North American Soccer League, in 1978.  Within two years, three weak sisters went belly up, and the panic was on.  Within six years, there were seven left.