Since 2019, the average MLS team’s valuation has climbed 85% to $579 million.
At the Los Angeles Football Club’s University Hills training facility, some 10 weeks after winning its first Major League Soccer title in a thrilling penalty shootout, lead managing owner Bennett Rosenthal is still processing his team’s spectacular season. “It’s a life experience that you don’t expect,” the 59-year-old says. “I think we’re all still smiling every day.”
Now Rosenthal has something else to celebrate—Forbes estimates that LAFC is worth $1 billion, just nine years after it joined MLS for an expansion fee of $110 million, making it the league’s first billion-dollar franchise. That’s more than double the $475 million Forbes determined it was worth in 2019, the last time we assessed North American soccer teams.
That’s an impressive return, but not one Rosenthal was banking on. “We did not do this because we thought it was the best place to put our capital,” says the cofounder of the $341 billion (AUM) Ares Management, who made his fortune finding profitable alternative investments. “We thought it could be fun and we’re making a great macro bet on the growth of the sport.”
LAFC’s ascent is the latest sign of just how much MLS has grown since it was founded in 1996. There are now 29 teams in the league—it began with 10—with St. Louis City SC set to debut this season. Since 2019, the average team valuation has climbed 85%, from $313 million to $579 million. And the price tag for the next expansion team (likely Las Vegas or San Diego) is expected to be $500 million, according to a well-placed industry source, a considerable increase from the previous record of $325 million set by billionaire David Tepper when he founded Charlotte FC in 2019.
Managing owners Bennett Rosenthal of Ares (bottom right), Larry Berg of Apollo (top left) and Brandon Beck (bottom left) of Riot Games rotate as team head every four years. Mandalay Entertainment’s Peter Guber has been executive chairman since 2014. Tim Tadder for Forbes
Billionaires have long believed in the potential of MLS. New England Patriots owner Robert Kraft and entertainment mogul Philip Anschutz were among MLS’ original owners, and a slew of others—including Tepper, Morningstar founder Joe Mansueto (Chicago Fire, 2018) and Qualtrics’ Ryan Smith (Real Salt Lake, 2022)—have since gotten in the game and driven up team values.
“It’s less of a financial hurdle to control an MLS team than [in] some other sports, so you do see more people who can do it,” says Rosenthal, who is worth an estimated $1.3 billion. “But I think people love it. They want to be a part of the community and the trajectory.” Forbes estimates there are at least 19 billionaires or members of billionaire families who have key ownership stakes in MLS franchises.
Rosenthal, who fell in love with soccer while managing his daughter’s team, and Apollo Global Management partner Larry Berg, who played the sport from age 8, became LAFC minority owners in 2014. The two knew each other well from the private equity world and had together invested in Italian soccer club A.S. Roma. “To be honest,” Berg says, “MLS wasn’t really sexy yet.” In 2016, they increased their stakes and became LAFC’s co–managing owners along with Riot Games cofounder Brandon Beck, who had invested in 2015, each agreeing to rotate as the team’s lead owner every four years. Rosenthal took on that role in January. As befits a team in Los Angeles, several celebrities—including Will Ferrell, Magic Johnson and Mia Hamm—have minority stakes in the club. Golden State Warriors co-owner Peter Guber is LAFC’s executive chairman. Meanwhile, LAFC built a $350 million, 22,000-seat soccer-specific stadium in downtown L.A. and barnstormed soccer bars and held pep rallies to build interest. It even sent fans to a match in Germany to study European fan culture.
Those investments have paid tremendous dividends. LAFC has sold out every MLS regular season and playoff match since its first kickoff in 2018. Celebrity superfans are frequently seen in the stands, with Justin Bieber and Wiz Khalifa attending the MLS Cup in November. And LAFC turned an estimated $8 million operating profit on a league- high $116 million in revenue last year. That figure is set to rise in 2023, with BMO agreeing to a league-record 10-year, $100 million stadium naming rights deal.
Just how far can LAFC and MLS go? More than half the clubs lose money and, with average revenue at $55 million, MLS teams can’t really compete against Europe’s soccer clubs for top players. “A billion dollars is a huge number. Nine times, eight times revenue is huge, particularly when you’re locked in to a certain degree on your media rights,” says Edwin E. Draughan, a vice president at sports investment bank Park Lane. (Manchester United, by contrast, is valued at $4.6 billion, or 6.9 times revenue.) The future for MLS investors is predicated on how much soccer continues to grow in North America, with hopes pinned on a new annual tournament between MLS and Mexico’s Liga MX kicking off in 2023. And in 2026, soccer should get another big boost when the United States, Canada and Mexico cohost the next World Cup.
Even more crucial is MLS’ new media rights deal with Apple, which has unified the league’s local and national broadcast rights under one umbrella. Per the arrangement, MLS is guaranteed at least $2.5 billion over 10 years, and possibly more based on subscriptions. It’s a big payday, but less than the $300 million annually the league reportedly expected, especially given that MLS must pay the production costs. While MLS has added ancillary TV deals with Fox, Univision, TSN and RDS, no major North American sports league has committed to a streaming-first strategy.
“Everything’s a gamble,” Rosenthal says. “But it’s a really smart bet.”
MLS Valuations 2023
Nos. 1-7
No. 1. $1 billion
Los Angeles Football Club
2022 Revenue: $116 million | Operating Income: $8 million
Key Owners: Bennett Rosenthal*, Brandon Beck, Larry Berg
Omar Vega/Getty Images
No. 2. $925 million
LA Galaxy
2022 Revenue: $98 million | Operating Income: $4 million
Key Owners: Philip Anschutz*
No.3. $850 million
Atlanta United FC
2022 Revenue: $81 million | Operating Income: $6 million
Key Owners: Arthur Blank*
No. 4. $800 million
New York City FC
2022 Revenue: $55 million | Operating Income: -$12 million
Key Owners: City Football Group
No. 5. $700 million
D.C. United
2022 Revenue: $70 million | Operating Income: $8 million
Key Owners: Jason Levien, Steven Kaplan
Scott Taetsch/Getty Images
No. 6. $690 million
Toronto FC
2022 Revenue: $62 million | Operating Income: -$15 million
Key Owners: MLSE (Larry Tanenbaum*)
No. 7. $680 million
Austin FC
2022 Revenue: $84 million | Operating Income: $2 million
Key Owners: Anthony Precourt
Nos. 8-14
No. 8. $660 million
Seattle Sounders FC
2022 Revenue: $66 million | Operating Income: $1 million
Key Owners: Adrian Hanauer, Jody Allen
No. 9. $650 million
Portland Timbers
2022 Revenue: $65 million | Operating Income: $1 million
Key Owners: Merritt Paulson
Simon Sturzaker/Getty Images
No. 10. $625 million
Charlotte FC
2022 Revenue: $69 million | Operating Income: $4 million
Key Owners: David Tepper*
No. 11. $600 million
Inter Miami CF
2022 Revenue: $56 million | Operating Income: -$5 million
Key Owners: Jorge* and Jose Mas, David Beckham
No. 12. $590 million
Sporting Kansas City
2022 Revenue: $59 million | Operating Income: -$3 million
Key Owners: Cliff Illig*, Patterson Family
No. 13. $575 million
Philadelphia Union
2022 Revenue: $54 million | Operating Income: -$8 million
Key Owners: Jay Sugarman
Omar Vega/Getty Images
No. 14. $560 million
FC Cincinnati
2022 Revenue: $56 million | Operating Income: -$1 million
Nos. 15-21
No. 15. $550 million
Columbus Crew
2022 Revenue: $55 million | Operating Income: -$8 million
No. 16. $540 million
Minnesota United FC
2022 Revenue: $54 million | Operating Income: -$1 million
Key Owners: Bill McGuire
No. 17. $525 million
New York Red Bulls
2022 Revenue: $50 million Operating Income: -$6 million
Key Owners: Red Bull GmbH
Ira L/Black Corbis/Getty Images
No. 18. $500 million
Nashville SC
2022 Revenue: $46 million | Operating Income: -$5 million
Key Owners: John Ingram*
No. 19. $475 million
New England Revolution
2022 Revenue: $37 million | Operating Income: -$4 million
Key Owners: Kraft Family*
No. 20. $450 million
San Jose Earthquakes
2022 Revenue: $43 million | Operating Income: -$5 million
Key Owners: John Fisher*
No. 21. $440 million
Real Salt Lake
2022 Revenue: $43 million | Operating Income: $0
Key Owners: David Blitzer*, Ryan Smith*
Nos. 22-28
No. 22. $435 million
Houston Dynamo FC
2022 Revenue: $39 million | Operating Income: -$10 million
Key Owners: Ted Segal
Michael Wyke/Ap
No. 23. $425 million
Chicago Fire FC
2022 Revenue: $25 million | Operating Income: -$18 million
Key Owners: Joe Mansueto*
No. 24. $420 million
Orlando City SC
2022 Revenue: $42 million | Operating Income: -$4 million
Key Owners: Wilf family
No. 25. $410 million
Vancouver Whitecaps FC
2022 Revenue: $21 million | Operating Income: -$15 million
Key Owners: Greg Kerfoot, Jeff Mallett, Steve Luczo
No. 26. $400 million
FC Dallas
2022 Revenue: $40 million | Operating Income: -$8 million
Key Owners: Clark and Dan Hunt*
No. 27. $375 million
CF Montréal
2022 Revenue: $30 million | Operating Income: -$12 million
Key Owners: Saputo family*
Andrew Katsampes/ISI Photos/Getty Images
No. 28. $350 million
Colorado Rapids
2022 Revenue: $33 million | Operating Income: -$5 million
Key Owners: Stan Kroenke*
METHODOLOGY
To rank the most valuable Major League Soccer franchises, Forbes examined recent transaction data, reviewed publicly available financial information and spoke to more than 40 team executives, owners, investment bankers and industry insiders. All published figures are Forbes estimates; team values do not include stadiums, real estate or debt. Revenue and operating income are for the 2022 season, and the latter represents earnings before interest, taxes, depreciation and amortization. Playoffs, player transfers and shared distributions from MLS were excluded from revenue calculations. Clubs’ ancillary revenue streams, such as non-MLS events, were included.
*Billionaires or billionaire families
MORE FROM FORBES
MORE FROM FORBES The 2022 World Cup’s Highest-Paid Players
MORE FROM FORBES Highest-Paid NFL Players 2022: Tom Brady Leads The List For The First Time
MORE FROM FORBES Majors, Monopolies, Megabucks And Donald Trump: Inside The Business Of The New Saudi Golf League
MORE FROM FORBES The World’s Highest-Paid Golfers 2022: LIV Golf Reshuffles Top Earners And Sends Pay Soaring