Major League Soccer is making some noise in the financial world.
Following a trend that has been set for professional sports leagues, Forbes Magazine conducted and published a recent look into the business side of the U.S. professional soccer league. Peter J. Schwartz and Kurt Badenhausen co-authored the findings, and by their assessment, it will not be long until owning an MLS franchise can be a money-making venture.
"One thing that is nice is that the league has made itself worth actually writing the article," said Real Salt Lake President Bill Manning. "It gives the league some credibility because this is something Forbes has done for years on the NFL, NBA, Major League Baseball. So from that standpoint, it is definitely a positive thing."
The Los Angeles Galaxy set the standard for the remaining 13 teams to follow. The team is valued at $100 million and turned a profit last season of around $4 million. The expansion team in Toronto had the second-highest value at $44 million and netted a cool $2.1 million, and Dallas was the only other team to turn a profit, albeit a small one at $0.5 million.
Real's franchise was valued at $30 million, No. 9 out of the 14 teams, and lost $2.1 million, but Forbes pointed out that when the move to the new stadium takes place next month, the additional revenue generated from concessions, parking and not paying a lease at Rice-Eccles will quickly turn those numbers around.
Where the numbers came from exactly, nobody with RSL or the league is sure, but Forbes said that the move will increase Real's revenues from $7.6 million this season to $20.3 million in 2009.
"I'm not sure what the actual numbers will be, but we will have more opportunity for revenue," Manning said. "We will have the premium seating revenue that we don't have now, the suites, the club seating, the front-row seating. With that, we also still have the affordable seating.
"It will help because we won't have to share the percentage with the tickets. There is increased sponsorship opportunities and ways to make more money. We can control all of the advertising and corporate partnerships."
Businessmen must see the raising value in the franchises. Just three years ago, Toronto paid around $10 million for an expansion team. The two new expansion teams in Seattle, set to join in 2009, and Philadelphia, to be added in 2010, will pay around three times that amount at $30 million, and the next two expansion teams, to be announced next season, are expected to pay fees upwards of $40 million."I was in the league earlier this decade and I was always asked how long is the league going to survive, when will it fold?" added Manning. "That isn't the case any more. I am very bullish with this league. I wouldn't have left the NFL if I wasn't sure that there is a good future for this league."
Major League Soccer revenue
TEAM . . . Value . . . Revenue . . . IncomeChicago . . . 41 . . . 16 -3.1Chivas . . . USA . . . 24 . . . 10 . . . -1.0Columbus 23 . . . 6 . . . -4.5Colorado . . . 31 . . . 11 . . . -2.2FCDallas 39 . . . 15 . . . 0.5DC . . . United . . . 35 . . . 13 . . . -3.0Houston . . . 33 . . . 10 . . . -1.8Kansas City . . . 22 . . . 5 . . . -2.9Los Angeles . . . 100 . . . 36 . . . 4.0New England . . . 27 . . . 10 . . . -1.5New York . . . 36 . . . 10 . . . -4.5Real Salt Lake 30 . . . 7 . . . -2.1Toronto . . . FC . . . 44 . . . 17 . . . 2.1TOTAL . . . 485 . . . 166 . . . -20.0numbers are in millionsSOURCE: Forbes Magazine