Forbes evaluation of MLS teams

[Yohan]

http://www.forbes.com/sites/chrissmith/2013/11/20/major-league-soccers-most-valuable-teams/

http://www.forbes.com/sites/chrissmith/2013/11/20/major-league-soccers-billionaire-owners/

http://www.forbes.com/sites/chrissmith/2013/11/20/major-league-soccers-stadium-revolution/



Team
Value ($M)
Revenue ($M)
Operating Income ($M)



Seattle Sounders
175
48.0
18.2



LA Galaxy
170
44.0
7.8



Portland Timbers
141
39.1
9.4



Houston Dynamo
125
32.6
8.2



Toronto FC
121
30.9
4.5



New York Red Bulls
114
28.1
-6.3



Sporting Kansas City
108
27.7
5.1



Chicago Fire
102
24.5
-3.2



FC Dallas
97
24.2
0.6



Montreal Impact
96
26.2
3.4



Philadelphia Union
90
21.4
1.1



New England Revolution
89
17.1
2.6



Vancouver Whitecaps
86
23.0
0.0



Real Salt Lake
85
23.0
-0.1



Colorado Rapids
76
18.1
-2.9



San Jose Earthquakes
75
15.0
-4.5



Columbus Crew
73
18.6
-1.6



DC United
71
17.7
-2.8



Chivas USA
64
15.0
-5.5




10 teams making a profit, 7 losing money

[Yohan]

2008 valuations:
http://www.forbes.com/2008/09/09/mls-soccer-beckham-biz-sports-cz_kb_0909mlsvalues.html




Team
2008 Value ($M)
2013 Value ($M)
Change ($M)



Seattle Sounders
30
175
145



Portland Timbers
40
141
101



Houston Dynamo
33
125
92



Sporting Kansas City
22
108
86



New York Red Bulls
36
114
78



Toronto FC
44
121
77



San Jose Earthquakes
0
75
75



LA Galaxy
100
170
70



New England Revolution
27
89
62



Chicago Fire
41
102
61



FC Dallas
39
97
58



Montreal Impact
40
96
56



Philadelphia Union
35
90
55



Real Salt Lake
30
85
55



Columbus Crew
23
73
50



Vancouver Whitecaps
40
86
46



Colorado Rapids
31
76
45



Chivas USA
24
64
40



DC United
35
71
36

[Red Skies At Night]

I don't the follow the ins and outs of the league that closely but I was quite surprised to see the fire and quakes losing $. The others didn't surprise me, I always assumed nyrb were losing $. What I'm intrigued to see is how portland and seattle do after the inevitable lean years/down cycle that all sports teams go through. I think seattle is very much a "flavour of the month" thing... at least thats the impression I get when talking to family and friends out there.

[TFC07]

Is TFC still making money? Not only that, but making more money than Montreal and Vancouver? lol TFC is top 5 most valuable club in MLS?

Shows you strength of Toronto market. Just imagine if we had a winning team how much more valuable TFC will be in the league?

[ag futbol]

Remember, value isn't just about what is there today but what your potential is in the future.

Picture a hot chick taking a flyer on a nerdy medical school student. We are that nerdy medical student, who coincidentally decided to stay unemployed post graduation and smoke pot in his parent's basement. If we ever cleaned up our act we'd make a shitload of money.

[Yohan]

I don't the follow the ins and outs of the league that closely but I was quite surprised to see the fire and quakes losing $. The others didn't surprise me, I always assumed nyrb were losing $. What I'm intrigued to see is how portland and seattle do after the inevitable lean years/down cycle that all sports teams go through. I think seattle is very much a "flavour of the month" thing... at least thats the impression I get when talking to family and friends out there.
SJ plays in Stanford university's stadium. less than 10k seating and terrible overall as sports venue. However, SJ plans to move into a new SSS in 2015, so their revenue should increase.

As for Seattle, that 'flavour of the month' lasted 4 years and counting.

[Red Skies At Night]

As for Seattle, that 'flavour of the month' lasted 4 years and counting.

True. But that is based on continuing on-field success. My question is when seattle invariably go through their rough patch (it happens to all clubs at some point) will they still have the large "rabid" fan support? Based on my feedback from people I know out there (admittedly a small sample size), I doubt it. Seems they are quite popular at the moment with many seattle residents who aren't necessarily football fans in the broader sense. I don't begrudge them their financial success, as they seem to be running their club the right way, just curious if they can maintain it.

[Beach_Red]

I don't the follow the ins and outs of the league that closely but I was quite surprised to see the fire and quakes losing $. The others didn't surprise me, I always assumed nyrb were losing $. What I'm intrigued to see is how portland and seattle do after the inevitable lean years/down cycle that all sports teams go through. I think seattle is very much a "flavour of the month" thing... at least thats the impression I get when talking to family and friends out there.

If Seattle is a flavor of the month then so is MLS. That probably concerns investors/owners more than anything on this list.

[mowe]

Surprised to see RSL barely breaking even. Probably due to limited sponsorship opportunities.

SKC and Houston are doing a nice bit of business though.

[Pint]

Are these actual numbers? i know when they do the NHL values that they are based off of specific formulas because teams are private entities and won't give them access to the actual information.

in any event over a 5 year period the league grew 1.288 billion in value (in terms of franchise value) as well as even the lowest growth teams doubled in value.

Also and this is a big factor when owning a team... actual profit on a yearly basis is not nearly as important as the change in franchise value.

[Initial B]

Once those teams like the Quakes and DCU get their own SSSs, I'm sure their profitability will increase. Chivas is probably a lost cause and they should move it to San Diego, Phoenix or Las Vegas - somewhere close to LA so the 'rivalry' can continue, but rebranded to lose the stigma and grow in a new TV market.

I'm flummoxed as to how NYRB are the biggest money loser in MLS, and yet they put another franchise in the area! Perhaps they need to rebrand/move the Red Bulls somewhere else as well. Baltimore might work, but moving them to Providence would allow them to rebrand as the Rhode Island Reds.

For comparison sake, here are the final MLS regular season attendence numbers:


Team
2013 Average Attendance
Capacity
Percent Full
2012 Average Attendance
% Change from 2011


Chicago Fire
15,228
20,000
76.14%
16,409
-7.20


Chivas USA
8,366
18,800
44.50%
13,056
-35.92


Colorado Rapids
15,440
18,086
85.37%
15,175
+1.75


Columbus Crew
16,080
20,145
79.82%
14,397
+11.69


DC United
13,646
19,467
70.10%
13,846
-1.45


FC Dallas
15,373
20,500
74.99%


14,199
+8.27


Houston Dynamo
19,923
22,039
90.40%
21,015
-5.20


Los Angeles Galaxy
22,152
27,000
82.04%
23,136
-4.25


Montreal Impact
20,603
20,521
100.40%
22,772
-9.52


NE Revolution
14,844
22,385
66.31%
14,001
+6.02


New York Red Bulls
19,461
25,189
77.26%
18,281
+6.45


Philadelphia Union
17,867
18,500
96.58%
18,053
-1.03


Portland Timbers
20,674
20,674
100.00%
20,438
+1.15


Real Salt Lake
19,218
20,213
95.08%
19,087
+0.68


San Jose Earthquakes
12,765
10,525
121.28%
13,293
-3.97


Seattle Sounders
44,038
38,500
114.39%
43,144
+2.07


Sporting Kansas City
19,709
18,467
106.73%
19,404
+1.57


Toronto FC
18,131
21,859
82.95%
18,155
-0.13


Vancouver Whitecaps
20,038
21,000
95.42%
19,475
+2.89


Average
18,608
21,256
87.54%
18,807
-1.06




I'd really like to see what the average attendence is for the playoffs - is it economically worthwhile?

[Yohan]

Surprised to see RSL barely breaking even. Probably due to limited sponsorship opportunities.

IIRC Rio Tinto and Xango reupped their sponsorship deal for more money this year

[ManUtd4ever]

Is TFC still making money? Not only that, but making more money than Montreal and Vancouver? lol TFC is top 5 most valuable club in MLS?

Shows you strength of Toronto market. Just imagine if we had a winning team how much more valuable TFC will be in the league?

Yup.

[prizby]

Is TFC still making money? Not only that, but making more money than Montreal and Vancouver? lol TFC is top 5 most valuable club in MLS?

Shows you strength of Toronto market. Just imagine if we had a winning team how much more valuable TFC will be in the league?

huge part has to do with some pretty big sponsorships they have.

[Oldtimer]

Are these actual numbers?

No they are estimates. They could be way off in some cases.

[Yohan]

for those tracking this, and thinking the salary cap should go way up, keep in mind that the numbers are from 2012, and this is Forbe's estimation, not using hard numbers from MLS teams.
also, I calculate 34 mil in profit from all teams. divide that by 19 teams and you get only 1.8mil per team profit. hardly the numbers you want to bank on to subsidize a huge increase in cap. (though we don't know how much profit or losses MLS FO makes)

[Haddy]

Long overdue article from Forbes.

Great sales pitch for the league too. Just in time to help clinch a TV deal, Miami franchise and then refer back to this for other potential investors / expansions.

"Give us a dollar and we'll turn it into five."

[jloome]

Long overdue article from Forbes.

Great sales pitch for the league too. Just in time to help clinch a TV deal, Miami franchise and then refer back to this for other potential investors / expansions.

"Give us a dollar and we'll turn it into five."

Somewhat important CAVEAT:

These numbers are largely fiction.

I don't mean they're entirely false, I mean corporate tax law in the U.S. allows vast amounts of write-down by corporate affiliation; so the final number they put out is entirely manipulated by the larger tax requirements of the parent corporation and probably doesn't reflect the actual situation.

[prizby]

Somewhat important CAVEAT:

These numbers are largely fiction.

I don't mean they're entirely false, I mean corporate tax law in the U.S. allows vast amounts of write-down by corporate affiliation; so the final number they put out is entirely manipulated by the larger tax requirements of the parent corporation and probably doesn't reflect the actual situation.

single entity structure also has an unusual law or two i believe

[Initial B]

I'm betting those profit numbers do not include TV revenue, as that is mostly dealt with by the league, isn't it?

And if they are pulling in 1.6 million per team in profit right now, then a 50% cap increase to $4.5 million would still leave the league in the black.

[Oldtimer]

I'm betting those profit numbers do not include TV revenue, as that is mostly dealt with by the league, isn't it?



BINGO! WE HAVE A WINNER!!!


The TV Revenue is booked by "Soccer United Marketing," which is mostly league-owned. Those profits don't show up in the individual team revenues unless they are paid out in dividends (they are probably mostly banking the cash for tax reasons).

Now for a hilarious take on the Forbes numbers:

http://owfss.tumblr.com/post/67662516749/exclusive-the-math-behind-forbes-mls-team-valuations

The TFC entry is as follows:


Assets:



100-person capacity locker room for as-yet unsigned DPs (+$2M)
Seven years of Allocation Funds for not qualifying for playoffs (+$200M)
Promises from ownership (+$0M)
Savings on stadium light usage (+$1M)

Liabilities:


Geographic association with Rob Ford (-$37M)
Severance packages for previous coaches (-$30M)
Settlement with Merriam-Webster for abuse of the phrase ”major announcement” (-$15M)

Net Value: $121M

[Yohan]

I'm betting those profit numbers do not include TV revenue, as that is mostly dealt with by the league, isn't it?

And if they are pulling in 1.6 million per team in profit right now, then a 50% cap increase to $4.5 million would still leave the league in the black.
national TV deals, no. local TV deals, probably yes.

[habstfc]

national TV deals, no. local TV deals, probably yes. It must include all tv deals, How can tfc only have twice the revenue of chivas, or seattle 3 time of chivas. These numbers don't add up unless you include the espn, tsn, rds, nbcsn and all local broadcast monies.

[Yohan]

It must include all tv deals, How can tfc only have twice the revenue of chivas, or seattle 3 time of chivas. These numbers don't add up unless you include the espn, tsn, rds, nbcsn and all local broadcast monies.
I dunno. I think MLS FO keeps some of the national TV money.

[habstfc]

One thing I don't like about this and other articles is when they state that mls draws a better average attendance than nhl and nba but don't point out the fact that nhl and nba on average has much higher ticket price. In most big cities with both nhl and nba and mls teams some teams have three times as high ticket price than mls. The sounders single handedly also bring up the league average by more than 1,000 fans as well.

[prizby]

they also don't state that NBA and NHL teams have a much higher salary cap...

[Richard]

Take those numbers with a huge grain of salt. This isn't the NHL, NBA, NFL or MLB where there are capologists and people with real knowledge of league revenues and accounting. MLS is very tightly controlled and I don't think there is adequate info to fully ascertain franchise values and revenues.

[Yohan]

Take those numbers with a huge grain of salt. This isn't the NHL, NBA, NFL or MLB where there are capologists and people with real knowledge of league revenues and accounting. MLS is very tightly controlled and I don't think there is adequate info to fully ascertain franchise values and revenues.
Forbes
Columbus Crew: $73 million (2012)
DC United: $71 million (2012)

Sold for:
Columbus Crew: $68 million (2013), includes stadium
DC United: $50 million (2012), no stadium

[Alonso]

BINGO! WE HAVE A WINNER!!!


The TV Revenue is booked by "Soccer United Marketing," which is mostly league-owned. Those profits don't show up in the individual team revenues unless they are paid out in dividends (they are probably mostly banking the cash for tax reasons).

Now for a hilarious take on the Forbes numbers:

http://owfss.tumblr.com/post/67662516749/exclusive-the-math-behind-forbes-mls-team-valuations

The TFC entry is as follows:



g:D



That made me laugh hard.

[Shakes McQueen]

Remember, value isn't just about what is there today but what your potential is in the future.

Picture a hot chick taking a flyer on a nerdy medical school student. We are that nerdy medical student, who coincidentally decided to stay unemployed post graduation and smoke pot in his parent's basement. If we ever cleaned up our act we'd make a shitload of money.

Yep. These are largely magc numbers, aided in part by the assumption that Torono would be a really strong market if our team ever gets it together.

- Scott

[Oldtimer]

Forbes
Columbus Crew: $73 million (2012)
DC United: $71 million (2012)

Sold for:
Columbus Crew: $68 million (2013), includes stadium
DC United: $50 million (2012), no stadium



$21 million off for DC United. Ouch! That's some serious leeway for error.

[Oldtimer]

national TV deals, no. local TV deals, probably yes.

All TV deals are handled by SUM, which holds all MLS broadcast rights.

[Yohan]

$21 million off for DC United. Ouch! That's some serious leeway for error.
bit of leeway, due to stadium situation.

[QBall]

Wow, is that all teams in MLS make? The Ohio State football team generates the same revenue as the best MLS team:

http://businessofcollegesports.com/2011/05/31/ohio-states-football-budget/

Makes the MLS look bush league.

[OgtheDim]

US College Ball is bigger then every other sporting league in the States but the NFL.

Heck, the Texas State High School Football Championships probably pull in more then the Nashville Predators.

[Richard]

Anyone else think college players should get paid in the states? Its so nuts when teams make 30+ million and the athletes only get tuition which sometimes is not even a 100%.

[Cashcleaner]

^ A friend of mine is big into college hoops and he'll rant for hours about that subject. It's true, though. These players are making money hand-over-fist for their schools and get so little in return - relatively speaking. I mean, it's a good thing they are getting an education and all, but the NCAA is all sorts of messed up when it comes to huge revenues and very little costs.