(by Chris Smith forbes.com 9-7-16)
"If MLS was a publicly traded company, now would be a really good time to buy."
That's the bullish take MLS commissioner Don Garber offers when we recently spoke about the league he's been leading for the last two decades. And we're on the subject of investment because there is a host of prospective buyers who agree with his opinion, and they're lining up around the block to get a piece of the next and, according to Garber, potentially final round of MLS expansion.
The cost to join will be high, and league president Mark Abbott raised plenty of eyebrows when he recently spoke of expansion fees going as high as $200 million for the next round. That represents a major increase to the price of entry, which was $40 million just four years ago. "There were a lot of questions and concerns among potential investors as to the price," says Garber of past expansion rounds, noting that each subsequent round had a then-record fee. "But today I think [team owners] are feeling pretty good about the investment they made in the league, regardless of the price they paid."
The numbers certainly bear that out: The average MLS team is now worth $185 million. That's up 18% over last year, 80% from 2013 and a staggering 400% from our first MLS valuations in 2008, when the average team was worth $37 million. The Seattle Sounders are once again the league's most valuable franchise, now worth $285 million or about as much as a low-level NHL team.
It's of course not as simple as comparing those current values to past expansion fees, since the league and its teams have spent two decades losing hundreds of millions of dollars, but that continuing investment by MLS owners has led to a league that truly seems to be on the path to joining soccer's elite ranks.
More than $3 billion has been invested in the league's soccer-specific stadiums, and a new wave of state-of-the-art training facilities means that millions more are being poured into the league's player development efforts. Those players are also faring much better today than ever before. Three years ago just nine MLS players were making $1 million or more in salary; today nearly two-dozen players have seven-figure salaries. And unlike in years past, when those top-paid stars were typically over-the-hill veterans, many of today's highest earners are also among the league's top performers.
(more to come)