LAFC is the First Billion-Dollar Franchise in MLS

Bennett Rosenthal, the lead managing owner of the Los Angeles Football Club, is still processing his team’s spectacular season at the club’s University Hills training facility, some 10 weeks after winning its first Major League Soccer title in a thrilling penalty shootout. Rosenthal now has another reason to celebrate: Forbes estimates that LAFC is worth $1 billion, just nine years after joining MLS for a $110 million expansion fee, making it the league’s first billion-dollar franchise. That’s more than double the $475 million Forbes estimated it was worth in 2019, when we last evaluated North American soccer teams. That’s an impressive return, but not one Rosenthal expected.

That’s an impressive return, but not one Rosenthal expected. LAFC’s rise is the latest indication of how far the league has come since its inception in 1996. The league now has 29 teams (it started with 10) with St. Louis City SC set to make its debut this season. The average team valuation has increased by 85% since 2019, from $313 million to $579 million. According to a well-placed industry source, the price tag for the next expansion team (likely Las Vegas or San Diego) is expected to be $500 million, a significant increase from the previous record of $325 million set by billionaire David Tepper when he founded Charlotte FC in 2019.

LAFC’s rise to number 1

LAFC’s investments have paid out huge dividends. Since its inception in 2018, LAFC has sold out every MLS regular season and playoff match. Celebrity superfans are frequently spotted in the stands, including Justin Bieber and Wiz Khalifa at the MLS Cup in November. Last year, LAFC earned an estimated $8 million in operating profit on a league-high $116 million in revenue. BMO has agreed to a league-record 10-year, $100 million stadium naming rights deal, which will begin in 2023. How far can LAFC and the MLS go? More than half of the clubs lose money, and with an average revenue of $55 million, MLS teams can’t compete for top players with European soccer clubs.

The future of MLS investors is dependent on how much soccer grows in North America, with hopes pinned on a new annual tournament starting in 2023 between MLS and Mexico’s Liga MX. Soccer should get a big boost in 2026 when the United States, Canada, and Mexico co-host the World Cup. Even more important is MLS’ new media rights agreement with Apple, which combines the league’s local and national broadcast rights under one roof. The agreement guarantees MLS at least $2.5 billion over ten years, and possibly more depending on subscriptions. It’s a sizable sum, but it’s less than the $300 million per year that the league reportedly expected, especially given that MLS must cover production costs.

Rox and Ken discuss how LAFC became the leagues most expensive franchise and what teams can challenge that number one spot.

Major League Soccer’s Most Valuable Franchises 2023

RankClub2023 Value2019 ValueChange% Change2019 RankRank Change
1LAFC$1 billion$475 million+ $525 million111%3+ 2
2LA Galaxy$925 million$480 million+ $445 million93%2
3Atlanta United$850 million$500 million+ $300 million60%1– 4
4NYCFC$800 million$385 million+ $415 million108%7+ 4
5DC United$700 million$330 million+ $370 million112%9+ 4
6Toronto FC$690 million$395 million+ $295 million75%5– 2
7Austin FC$680 million
8Seattle Sounders$660 million$405 million+ $225 million56%4– 5
9Portland Timbers$650 million$390 million+ $260 million67%6– 4
10Charlotte FC$625 million
11Inter Miami CF$600 million
12Sporting Kansas City$590 million$325 million+ $265 million82%10– 3
13Phildelphia Union$575 million$240 million+ $325 million135%18+ 4
14FC Cincinnati$560 million
15Columbus Crew$550 million$200 million+ $350 million175%23+ 7
16Minnestoa United FC$540 million$300 million+ $240 million80%11– 6
17New Jersey Red Buls$525 million$290 million+ $235 million81%13– 5
18Nashville SC$500 million
19New England Revolution$475 million$245 million+ $230 million94%17– 3
20San Jose Earthquakes$450 million$275 million+ $175 million64%16– 5
21Real Salt Lake$440 million$235 million+ $205 million87%19– 3
22Houston Dynamo$435 million$280 million+ $155 million55%15– 8
23Chicago Fire$425 million$335 million+ $90 million27%8– 16
24Orlando City$420 million$295 million+ $125 million42%12– 13
25Vancouver Whitecaps$410 million$215 million+ $195 million91%21– 5
26FC Dallas$400 million$220 million+ $180 million82%20– 7
27CF MontrĂ©al$375 million$210 million+ $165 million79%22– 6
28Colorado Rapids$350 million$190 million+ $160 million84%24– 5

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