Keep The Ball Rolling: Target, adidas, Fans Drive Value Of MLS Clubs To Record $4.5B
Thursday, August 17, 2017 at 03:01PM
NYSportsJournalism.com in Los Angeles Galaxy, MLS, Soccer, soccer, sports franchises, sports marketing

By Barry Janoff

August 16, 2017: Driven by new alliances with such major companies as Target and with a renewed and enhanced long-term $700 million deal with adidas, the value of Major League Soccer and its clubs has hit a record $4.46 billion.

Concurrently, the average MLS club is now worth $223 million, up 20% from last year, according to a new report from Forbes.

The financial data was based on 20 clubs that were in the league prior to the current season.

Atlanta United and Minnesota United FC, which both joined MLS this year, were not included, but will be next year after they have a full year of financial data in the league.

"Major League Soccer teams are surging in value as the league continues to grow in size, popularity and financial success," according to Forbes' Chris Smith.

Attendance has seen a steady climb since 2010, when total league attendance was 4 million. In 2011 it reached 5.5 million, in 2012 and 2013 6 million, in 2014 6.2 million, in 2015 7.3 million and in 2016 7.4 million.

The league has topped 5.5 million to date this year and seems on track to top 7 million again, led by the Sounders, which average a league-high 42,800 per game.

Although on the rise, MLS values pale in comparison to other leagues and teams.

The NFL’s Dallas Cowboys are the most valuable sports franchise in the world, valued at $4.2 billion, followed by MLB’s New York Yankees ($3.7 billion) and three iconic soccer clubs: Manchester United ($3.69 billion), Barcelona ($3.64 billion) and Real Madrid ($3.58 billion), per Forbes.

The most profitable MLS club is the Los Angeles Galaxy, valued at $315 million with $63 million in revenue, replacing the Seattle Sounders ($295 million value, $53 million revenue) from the previous year, according to Forbes.

MLS said the Galaxy also has the league's most valuable broadcasting rights deal (with Spectrum SportsNet, $5.5 million per year) and stadium naming rights deal (StubHub, $10 million-plus per year).

Seattle could return to the top spot in the near future. The club has signed with WME-IMG to sell a sponsorship package that would include the team’s jersey-front, match-day field and training ground rights after its current deal with Microsoft’s Xbox expires after next season.

The Top Five also includes Toronto FC ($280 million value, $46 million revenue), New York City FC ($275 million value, $34 million revenue) and Orlando City SC ($272 million value, $33 million revenue).

"(That) NYCFC and Orlando — both of whom entered the league in 2015 — rank in the top five is illustrative of a wider trend of the league’s newer clubs quickly finding off-field success," according to Forbes.

The biggest change in value from the previous year belongs to DC United, with the club is worth $230 million (No, 11 overall), a 48% increase from last year.

DC United in 2018 plans to move into its new $300 million venue, Audi Field, now under construction (rendition pictured above).

"Audi has transcended the automobile industry and fully embraced the culture of soccer, especially in MLS," Jason Levien, D.C. United managing general partner, said in a statement when the deal with Audi was unveiled earlier this year. "We couldn’t think of a better partner to name our stadium and we look forward to forging extraordinary memories for years to come at Audi Field."

MLS has a bevy of other stadium naming rights deals, including Toyota Park (Chicago Fire) and Toyota Stadium (FC Dallas), Dick’s Sporting Goods Park (Colorado Rapids),Red Bull Arena (New York Red Bulls), Rio Tinto Stadium (Real Salt Lake) and Avaya Stadium (San Jose Earthquakes).

The MLS boost from adidas comes as first-year MLS partner Target is ramping up its investment and time in the league and soccer, including $14 million to promote and develop youth soccer in the U.S.

As part of the strategy, Target has partnered with a number of its leading vendors, including Belkin, Crest, Degree, Dove, Energizer, GE, Gillette, GSK, Hershey’s, Kimberly-Clark, Philips, Scotch-Brite, Smuckers, Tide and Venus.

"There are so many things that drew us to soccer — it’s multicultural, watched and played by families and is growing immensely in popularity,” Rick Gomez, svp-marketing for Target, said in a statement. "We’ve partnered with several incredible organizations and vendors to invite soccer fans everywhere to engage with the Target brand in new ways."

Target said it sold one million soccer balls last year and that sales of soccer-related merchandise rose 15%, its "fastest growing sub-category in the sporting goods business."

Although trailing other major sports in the U.S., the value of MLS and its clubs is expected to continue grow.

"There is extraordinary demand for expansion teams even though the league’s expansion fee is now $150 million, up a whopping 50% from the $100 million that New York City FC paid to join the league just a few years ago," according to Forbes.

Most Valuable MLS Franchises
1. Los Angeles Galaxy $315M value $63M revenue
2. Seattle Sounders $295M value $53M revenue
3. Toronto FC $280M value $46M revenue
4. New York City FC $275M value $3M4 revenue
5. Orlando City SC $272M value $33M revenue
SOURCE: FORBES

MLS, adidas Sign $700M Deal To Extend Partnership Through 2024

Target Buys Into Major Alliance With MLS

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