Are you interested in understanding the Major League Soccer business model? Our major league soccer business facts give you a quick overview about the most important facts and the economic site of this business.
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Major League Soccer Business Model Introduction
In comparison to other leagues in Europe like the German Bundesliga the US “Major League Soccer (MLS) operates under a single-entity structure in which teams and player contracts are centrally owned by the league. Each MLS team has an investor-operator that is a shareholder in the league.”
This means that when a new owner or ownership group joins the league, he or they have to pay a fee, get the authorization to run a club and become a partner in the league. Because all clubs are owned by MLS, all the revenue belongs to the league and not to the individual club. But the clubs get a certain percentage of all revenues like the media right payments, sponsorships, ticket sales or players sales.
Major League Soccer Business Model Revenues
First of all, owners get a share of the profit that the league makes. This includes ownership of Soccer United Marketing (SUM) that handles all television rights for the MLS and used to handle all other soccer in America.
In addition, the valuation of the clubs is rising. For example, when Toronto FC joined the league, the owners had to pay $10 Million. Now, a new team has to pay several hundred million. According to sports.yahoo.com Charlotte had to pay $325 million in 2019.
Major League Soccer Business Model vs European Soccer Leagues
To sum it up, the MLS Business Model is not so much about winning the cup like in European Leagues but mainly about building a stronger brand (MLS) and raising the overall valuation. Or in other words “it is commonly accepted that North American professional sports teams typically optimize their business model for ‘profit maximization’, in contrast to soccer clubs elsewhere, which aim for ‘win maximization’ under varying degrees of budget constraints.”
Is the Major Soccer League Business Model a Promising Investment?
“Looking at the team valuations today and measuring them against the growth that has occurred over slightly more than 20 years in the league, the founding investors have witnessed explosive growth over the years in team valuation (Forbes, 2018). This growth, however, must be measured against the initial years of operational losses. With this in mind, the question is whether investing large sums of money to enter the league now is a promising investment.
The attractiveness of this investment derives directly from the future situation of the league, e.g., profitability via talent development, increased quality, and high revenue-generation through growing fan interest and thus better media deals and more sponsorship interest, while reaping the fruits of all of the previous investments in the framework of the league (e.g., academies, soccer-specific stadiums, more expertise in the form of more highly educated and qualified coaches, specialists, etc.).”
Our Takeaway on the Major League Soccer Business Model
Also elite players like Ronaldo and co might strive to compete on the best stages, which are currently in Europe, money speaks a language of its own. The main key to a better long term return on investment is to invest in higher player salaries and thus attract more fans because fans have a strong tendency to follow the best players. This would also result in much better media rights returns. To turn the Major League soccer business model into a long term success more money needs to be invested.
Here are some more Major league soccer facts you may find helpful.
MLS Soccer Team Names
- Atlanta United
- Austin FC
- Charlotte FC
- Chicago Fire FC
- FC Cincinnati
- Colorado Rapids
- Columbus Crew
- D.C. United
- FC Dallas
- Houston Dynamo FC
- Sporting Kansas City
- LA Galaxy
- Los Angeles Football Club
- Inter Miami CF
- Minnesota United
- CF Montréal
- Nashville SC
- New England Revolution
- New York Red Bulls
- New York City FC
- Orlando City
- Philadelphia Union
- Portland Timbers
- Real Salt Lake
- San Jose Earthquakes
- Seattle Sounders FC
- Toronto FC
- Vancouver Whitecaps FC
How Many Games in MLS Soccer Season?
Each side plays 34 games during the regular season – 17 at home and 17 away.
How Long is Soccer Season?
Major League Soccer’s regular season runs from late February or early March to October.
Sources
www.foxsports.com
