On the latest Sporticast episode, hosts Scott Soshnick and Eben Novy-Williams chat with Sportico reporter Kurt Badenhausen about his most recent MLS valuations. The data, published Wednesday, had LAFC as the league’s most valuable team, at $900 million, with the average club now worth $582 million.
MLS investors believe strongly that U.S. soccer will undergo significant commercial growth in the next five to 10 years, as the country prepares to host the men’s World Cup, the Summer Olympics and possibly another women’s World Cup. As inflated as the numbers may seem, the league has attracted some of the most prominent investors in other leagues, including recent additions David Tepper, David Blitzer, the Wilf Family and Arctos Sports Partners.
The trio discuss the new Apple/MLS media deal, the league’s struggles in the country’s largest markets, and an oddity of the MLS business: In most leagues, minority stakes sell at a discount relative to the valuation in a controlling stake sale. In MLS, minority stakes tend to be selling at an increase. As an example, Sportico values FC Cincinnati at $550 million, but the club is currently raising money at a valuation near $800 million.
They also discuss how to think about MLS valuations within the context of other, bigger European leagues. Last year Sportico published valuations for the English Premier League, and half of those teams would be the least valuable club in MLS. The lack of promotion/relegation definitely bolsters the MLS numbers, as does the fixed costs that don’t exist in the free-spending European leagues, where deep-pocketed owners like those behind Manchester City and Paris Saint-Germain have dramatically raised the stakes for fielding competitive teams.