Running a sports team isn’t easy, and like any other business venture, it’s an investment that has risks and rewards. The United States of America is the home to many significant professional sports leagues and sees sports as a big culture. One particular league is the MLS. With expansion teams like Inter Miami and Nashville coming about in this season, as well as Austin, Texas, Charlotte, North Carolina in 2021, and St. Louis and Sacramento two years from now – the potential of this league is very promising. Therefore, it might be interesting to delve into the costs and prices of running a team that competes in such leagues.
Inter Miami’s owner, football legend David Beckham, got a steal of a deal with a $25 million expansion fee, reminiscent of the early MLS expansion price rates (Toronto FC’s 2007 $10 million fees as reference) compared to North Carolina’s $325 million, and St Louis’ and Sacramento’s $200 million fees. This is no loose change; that’s why it’s essential to plan things out before it ends up being a bubble bursting.
In the 2018 Forbes List of the Most Profitable MLS Teams, Atlanta United ranked first, coming in at around a 500 million dollar valuation. This could be due to many factors: the soccer scene in the city, the great amount of belief that the owners and front office have in the club, the winning history and talent of the club amongst its fellow MLS counterparts, and many more.
The average MLS team is worth around $313 million, according to Forbes. Hold your horses, though, as it doesn’t seem like all of these teams are making a profit. According to them, 16 out of the 24 teams had a negative operating income in 2018. That is why you need to plan. Otherwise, you might end up like the old NASL of the 20th century, where, although they brought in stars like Beckenbauer and Pele, they had to rely on that expansion fee for the league’s survival. And as you know, that didn’t turn out very well and ultimately resulted in a drought for professional soccer for nearly 20 years in the U.S.
Expansion might be the answer, but it’s crucial to have built that grassroots and love for the game within the city you’re based in if you’re a team owner. Bringing up examples of places like Los Angeles (with their very own LAFC and LA Galaxy), Seattle, and our very own Atlanta GA, you can see that there was already a pre-existing love for the sport. In Atlanta’s case, there was a yearning to include people from all different walks of life who loved the game.
Building that love and awareness is one thing, but when you’re in the league already, as a player of an expansion team, you have to hope that your owners are those you can trust to make sacrifices and right decisions. In the case of Atlanta United, owner Arthur Blank and president Darren Eales were willing to shell out money and find a plan to bring a group of players and coaches to their team. Let’s hope that the owners of other teams are willing to do the same.