Finance Uncategorized

MLS growing, but losing money

Has MLS been growing fast enough to be considered among the elite leagues in professional sports?

(Kelvin Kuo-USA TODAY Sports)
(Kelvin Kuo-USA TODAY Sports)

There is no doubt that Major League Soccer has made tremendous strides as the popularity of soccer continues to grow in the United States. But has it been growing fast enough to be considered among the elite leagues in professional soccer?

FIFA president Sepp Blatter and U.S. men’s national team coach Jurgen Klinsmann certainly don’t think so. During a World Cup press conference this summer, Klinsmann suggested that American players such as Clint Dempsey and Michael Bradley damage their careers when they leave European clubs for the MLS. Last year, Blatter described the MLS as a “struggling” league that has not reached the level of other U.S. leagues such as the NBA, MLB and the NFL. He criticized the league’s post-1994 World Cup expansion, saying MLS has had more than enough time to develop.

(Noah K. Murray-USA TODAY Sports)
(Noah K. Murray-USA TODAY Sports)

However, to American soccer observers, MLS has done nothing but take off over the past 18 years. The league has expanded from 10 teams to 20 teams in 2015, and has a league-record average attendance of 19,149, which tops the NHL and NBA. The values of franchises have increased as well, from a $5 million purchase price in 2002 to $100 million today, and as evidenced by heavy competition for future expansion between cities such as Las Vegas and Sacramento.

But expansion comes with a price: $100 million to be exact. According to MLS commissioner Don Garber, the league is losing more than $100 million annually due to player acquisitions, stadium fees and spending on league infrastructure. And the future is uncertain, because two of the biggest names in MLS for years — Landon Donovan and Thiery Henry — have just completed their MLS careers. Replacing their star power will be expensive.

Robert Kraft and Philip Anschutz each own multiple sports properties, including MLS teams. (Kirby Lee-USA TODAY Sports)
Robert Kraft and Philip Anschutz each own multiple sports properties, including MLS teams. (Kirby Lee-USA TODAY Sports)

Still, it seems everyone wants a piece of the growing MLS pie. New York and Orlando have announced that they will be joining the league next season, Atlanta and Los Angeles will add new franchises in 2017 and David Beckham has been all but promised a team in Miami. But how much more time does the league need to become a major factor in not only the U.S. sports landscape, but among international soccer leagues? We may have to wait until the league starts making money, not losing it.

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