In this View From article, Kurt Badenhausen Sportico’s Sports Valuations Reporter, looks into the MLS team valuations in 2024.
Major League Soccer kicked off its first season in 1996 and has long fought for attention in the U.S. compared to its more established major sports league rivals. The same applied on the global soccer stage. Six months ago, that all changed when arguably the most famous living person on the planet announced he was coming to America.
“This is a fantastic opportunity, and together we will continue to build this beautiful project,” Lionel Messi said in a statement announcing his signing with Inter Miami CF. “The idea is to work together to achieve the objectives we set, and I’m very eager to start helping here in my new home.”
Suddenly, the eyes of the world were on MLS, and Messi’s arrival helped goose two league initiatives—an Apple streaming deal and Leagues Cup in-season tournament—that began in 2023. Messi matches became a must-see, as celebrities, such as LeBron James, Prince Harry, Leonardo DiCaprio and Kim Kardashian, attended Inter Miami games and fans scrambled to sign up for MLS Season Pass on Apple TV. Inter Miami revenue more than doubled with a half-season of Messi, and nearly every club had a halo effect from the arrival of the eight-time Ballon d’Or winner.
MLS clubs now have an opportunity and challenge: how to lock in a portion of those newly introduced fans long-term with the World Cup in North America in 2026 another catalyst for the league.
During the last month, Sportico connected with more than 60 people around MLS, including team owners, bankers, executives, investors and consultants to gauge the health of the league and what’s next for its soon-to-be 30 teams—San Diego FC joins MLS next season. The Messi, Apple, World Cup and Leagues Cup quartet provides a foundation for the league to increase revenue and grow into its rich revenue-multiple valuations.
The average team is worth an estimated $678 million, up 16% from Sportico’s last MLS deep-dive in September 2022. Four clubs topped the $1 billion mark, including Los Angeles FC ($1.15 billion), Atlanta United ($1.05 billion), Inter Miami ($1.02 billion) and LA Galaxy ($1 billion). Collectively, the 29 teams are worth $19.7 billion, including real estate and team-related businesses held by owners, such as NWSL clubs.
Click for a ranking of all 30 teams or a data visualization comparing the teams.
The Power of Messi
MLS teams generated an estimated $2 billion in revenue last season, up 27% compared to the prior year. It includes local revenue, including non-MLS event revenue for teams that operate their stadiums, as well as their cut of league revenue from media deals, sponsorships, merchandise, shared gate receipts and Soccer United Marketing (SUM). Revenue growth was driven mainly by Messi, more matches and a new club (St. Louis City FC).
Local revenue represents more than 85% of the total. Teams don’t actually receive an annual check from MLS, as its single-entity structure means player contracts are “owned” and paid by the league. The cost of players and league operations outstrips central revenue, requiring teams to fund those expenses via an annual assessment.
The league incentivized teams to increase revenue last year when it cut the share of ticket revenue the league collects from 33% to 10%—it still collects the higher rate for crowds over 30,000 fans. The logic was to reward teams who are making the biggest investments in their stadiums. The move juiced the revenue of clubs like LAFC and Atlanta United, as well as anyone who got to host Messi.
Miami’s revenue hit an estimated $127 million, up from $55 million. Last season was just an appetizer for the club’s finances, as revenue could hit $200 million this year with a full season of Messi that includes preseason tour stops in El Salvador, Saudi Arabia, Hong Kong and Japan.
Inter Miami signed sponsorship deals in recent years that included escalators if it signed a player with multiple Ballon d’Or awards—Messi and Cristiano Ronaldo are the only active players that fit the criteria. In December, it added Royal Caribbean as its new front-of-jersey sponsor. Messi is signed for another two seasons and helps Miami lay a revenue foundation when its new stadium opens in 2025.
The Messi pixie dust touched clubs around the league. The Chicago Fire have one of the league’s lowest season ticket bases and play in an NFL stadium, which allowed the club to fully capitalize on its Miami game with an MLS record $10.5 million gate. Nashville hosted Inter Miami in the Leagues Cup final, which fell outside its season ticket package and produced a nearly $10 million gate.
The impact went beyond just one game. Viewership for Nashville games on Apple jumped roughly 30% for the rest of the season after the Leagues Cup final. Chicago doubled the size of its corporate partnerships team and tripled its sales staff. “It allowed us to be in a position to really leverage the opportunity when Messi came to town,” Dave Baldwin, Fire president of business operations, said in a video interview.
Messi missed the Chicago game due to injury, but the Fire enticed the huge crowd with discounts on 2024 season tickets that have boosted those sales by 75%. The Inter Miami game was the first time that the Fire had sold out all 130 suites at Soldier Field. It offered a free suite to the game for anyone that leased a suite for the entire 2024 season. The club did not sell any suites on an annual basis last year at Soldier Field but is expecting at least 50 sold by the start of this season. Sponsorship revenue rose 100%, including Carvana as a new jersey sponsor after playing 2023 without one.
Messi is playing in Kansas City this year, and the team moved the game from its 18,500-seat home, Children’s Mercy Park, to 76,000-seat Arrowhead Stadium, home of the NFL’s Kansas City Chiefs. The team debated keeping the game at its home venue but recognized the opportunity to reach a larger audience.
“You are going to get a lot of first-time people at a Kansas City soccer game,” Sporting KC CEO Jake Reid said in a phone interview. “We are going to expose 70,000-plus fans at the loudest stadium in the world to the greatest player of all time, and at that point, it is on us to reach out and convert them.”
Reid says they have a plan in place to activate these new leads as long-term customers and points to the team’s experience in 2010 when Manchester United played there.
Messi’s Inter Miami arrival coincided with the opening game of Leagues Cup between Inter Miami and Cruz Azul. It was a marketing hat trick for Apple and its new MLS service as subscriptions doubled post-Messi to a peak of nearly 2 million, which dipped only slightly after Leagues Cup was over, according to multiple sources familiar with the signups. Subscriptions blew past the original projections in 2023, and now the focus is on renewals heading into 2024.
The subscription numbers include season-ticket holders, who receive access to MLS Season Pass as part of their ticketing plans. Multiple teams highlighted the free access to the Apple subscription as a marketing tool that has helped boost season ticket sales in 2024.
The 10-year, $2.5 billion Apple deal is a critical one for the league. The rights fee alone provides a shot of revenue for teams, but the key is to get into the revenue sharing part of the contract. Many clubs thought the back half of the deal is when they might capture some upside, but the robust Year 1 subscriptions have bumped those expectations to 2025 and even this year in the most optimistic viewpoints. Even if revenue sharing is not part of the 2024 equation, the net revenue for MLS from the Apple deal should jump after hefty upfront costs last season for production.
Leagues Cup featured 77 matches between 47 clubs in MLS and Mexico’s Liga MX and will be back in 2024. The tournament got its storybook ending with Miami title, and it provided another chance to introduce new fans to MLS. CF Montreal hosted Pumas in a game that attracted a large Mexican audience to Saputo Stadium. This season, Montreal sold out season tickets for the first time in franchise history, boosted in part by a visit from Messi in May.
The U.S. has an influx of soccer competitions ahead with the 2024 Copa America, 2025 Club World Cup and 2026 men’s World Cup all set to be played here, with a bid for the 2027 women’s World Cup also submitted.
“It’s really about, what do we want to be by 2027,” Don Garber, MLS commissioner, told the media in December ahead of the MLS Cup. “We’re going to have the eyes of the world on us. The soccer market here in the United States is going to be exposed to the entire global soccer and football community. That is the pressure that we’re under to ensure, as everybody’s paying attention to us, what is the product that we can deliver?”
It is a question teams and the league are pondering. Clubs were taken aback when Jorge Mas committed $150 million to Messi over two-and-a-half years, including an equity stake in Inter Miami, but his big bet has proven fruitful with the value of his club up more than $400 million in a year. There are not any other Messis available, but attracting better talent requires more funding, and almost every MLS team operates in the red after debt service.
The league is considering tweaks to roster rules and potentially some kind of player acquisition fund that could be backed with third-party money, according to multiple people. In 2012, the league sold 25% of SUM to Providence Equity Partners before re-acquiring the stake five years later. The deep pockets of the existing ownership groups could also bankroll any initiatives to target more stars. MLS’ powerful product strategy committee, which is co-chaired by owners Clark Hunt (FC Dallas) and Greg Kerfoot (Vancouver), is expected to issue its recommendations later in 2024 to the full MLS ownership.
Team Sales
“While the motivations behind investing in a team may be similar, the strategies and requirements behind investing in an MLS franchise and a European football club will meaningfully differ,” AJ Swoboda, managing director at sports intelligence firm Twenty First Group, said in a phone interview. “MLS represents different economics, a different ecosystem, different time horizon—all of which present unique opportunities and challenges for investors.”
He ticks off the bull case: world’s most popular sport in the world’s richest sports system, cost controls, long-term owners with “patient” capital, new stadiums, blue-chip partners, and a single-entity structure impacting ownership collaboration and innovation.
MLS clubs have traded at high revenue multiples based on this promise and continue to be valued at nearly 10 times revenue, which is down slightly from last year but ahead of every major U.S. sports league besides the NBA, which is at 11 times revenue. MLS also benefits from the currently insatiable appetite for sports team assets that led to one-year value increases in the NBA (33%), NHL (29%) and NFL (24%); MLB is most challenged by the meltdown in the RSN model and increased values only 2% last year.
One critical difference between MLS and its sister U.S. sports leagues: The other sports have cornered the market on player talent and subsequent revenue driven by it, while global soccer has dozens of leagues competing for players, eyeballs and revenue.
It has been two years since an MLS club was sold, dating to Real Salt Lake’s purchase by David Blitzer and Ryan Smith on the heels of team sales for the Houston Dynamo and Orlando City SC. The three transactions were all completed at valuations of roughly $400 million or slightly lower. All three deals also included NWSL teams, which were typically valued at $2 million to $5 million at the time. Since then, the value of NWSL clubs has soared to an average of $66 million, helping propel double-digit one-year value gains for their parent companies. The Portland Timbers recently sold their NWSL club, while Seattle Sounders ownership is close to a deal for the Seattle Reign; our $795 million value for the Sounders does not include the Reign.
The current crop of MLS owners are largely intent on holding onto their assets to see where this league goes heading into the 2026 World Cup, but teams have tapped investors to raise funds in minority interest deals to help fund stadium improvements, training facilities and real estate developments. The Dynamo raised money at a $750 million valuation, including the NWSL’s Dash, while D.C. United sold a small LP stake at a valuation north of $1 billion, including its mixed-use development around Audi Field.
At least a half-dozen other clubs are exploring raising money through LP sales.
MLS stands out from the other major U.S. sports league for its teams’ ability to raise funds at valuations well above what most bankers think a control sale would occur. A smaller check size can also get you in the door in a much different way than what is available in the NFL or NBA, where the average valuations are $5.1 billion and $4 billion.
Sportico’s valuations are based on a control transaction where a new owner takes over. We value control of Houston at $550 million and D.C. at $720 million.
The league continues to have success with its newest clubs. St. Louis City SC, which we value at $635 million, kicked off play last year and was an instant hit on and off the field. It broke the record for wins by an expansion team on route to the Western Conference title. The stadium was sold out for the season, and the club established a season ticket waiting list. Only Inter Miami had higher merchandise sales.
San Diego starts play this year after paying a record $500 million expansion fee. Egyptian billionaire Mohamed Mansour is the lead owner and will pay the expansion fee over multiple years, resulting in a net present value of between $400 million and $450 million, depending on the discount rate applied. Mansour is also on the hook for startup costs and a new training facility.
Inter Miami was the biggest valuation gainer, up 74%, followed by LAFC (28%), Austin FC (27% to $800 million) and Philadelphia Union (23% to $685 million).
Last year, LAFC signed a 10-year, $100 million naming rights deal for its stadium with Bank of Montreal, and its non-MLS events at BMO Stadium have soared. It sold 1.3 million tickets for concerts, festivals and soccer matches in 2023.
Austin has taken advantage of its spot as the only major pro sports franchise in the Texas capital. Fans have embraced the club with sellouts for every game since it started play in 2021. It has a paid season ticket waiting list of 26,000 fans.
And after Philadelphia’s dominant 2022 on-field performance, where the team made it to the MLS Cup final, fans snapped up Union season tickets. It was one of just four MLS clubs—LAFC, Austin and St. Louis—to sell out every game last year.
