Business magazine Forbes, has compiled the values of all MLS franchises for the first time in five years. With MLS clubs being notoriously secretive about revenues and loses, this is data that many people have been waiting to see. The last time financial figures were calculated was back in 2008. In the five years since then, Major League Soccer has grown exponentially, adding five new franchises, Seattle, Portland, Vancouver, Montréal, and of course Philadelphia.
Forbes was reluctant to disclose exactly how they came up with these figures, a spokesperson had this to say:
“operating income is team earnings before interest, taxes, depreciation and amortization,” and that “valuations are based on multiples of revenue, using recent transactions as a guide.”
With Forbes being the company that also compiles all financial data for the four major sports league in the United States, it is safe to say the data is accurate.
Forbes’ estimate on possibly the most secretive club in all of MLS is $90 million, putting Philadelphia 11th in the league out of 19. The clubs total revenue for all transactions came in $21.4 million(13th in the MLS) with total profits amounting to $1.1 million(9th in the MLS).
In contrast the league most valuable club is the Seattle Sounders. The Sounders were evaluated at $175 million with a whooping profit of $18.2 million. The figures are not surprising if you consider their massive fan base and their average attendance of 45,000.
Although seeing the Union so far down the list may be disheartening for many Union fans, the league as a whole is certainly on the way up.
In just five years from the last Forbes report the average value of an MLS franchise has jumped an incredible 190% from $37 million to $109 million. 10 out of the 19 clubs were able to bank a profit, but many experts have said these profits weren’t enough to provide true financial stability for the long haul.
Although the outlook may look good for MLS on the surface, with stable attendance and two cities being awarded new teams, underlying factors bring the league back to reality. The television ratings for all league games fell off a cliff last year, dropping a staggering 31% on ESPN and 13% on NBCSN. The rights to broadcast MLS are coming to a close and executives from Major League Soccer have already started new contract negotiations with the respected networks. Any further growth of MLS may lie on the backs of such TV deals and a more streamlined schedule.
With the 2014 World Cup in Brazil this summer MLS will look to get a popularity boost similar to the boost after the previous world cup.
Philadelphia Union CEO Nick Sakiewicz confirmed earlier in the month that new manager John Hackworth’s job is safe. Hackworth has been able to alleviate some of the pressure on the salary cap, concerns that arose during Peter Nowak’s tenure. The Union will be looking to raise the clubs value with big moves this off-season. CEO Nick Sakiewicz had this to say:
“With what John had to work with coming out of the Nowak roster and salary-cap situation, I think John and the guys did an excellent job getting us into a good position,” “And even better, he made some moves during the season that put our salary cup situation in a good place. And the ownership is putting more resources to help add some very vital pieces for us for next year. “We’ve got some money to spend to make some improvements and we’re going to do that.”