The current revenue per team is around $7.3 mil for MLS. Some guessworks: Sponsorship: $2 mil Ticket Revenue: $3.3 mil ($20 x 15 games x 11,000 paid tickets) Jersey sponsorship: $0.7 mil TV rights: $1.2 mil Merchandise: $0.1 mil TOTAL: $7.3 mil Stadium naming rights are assumed to go directly into paying for the construction of the stadium (HDC, Pizza Hut Park, Toyota Park, BMO Field, Dicks sporting goods, etc....). Also, many teams don't have this revenue stream. Major Expenses: Player Salary, Travel, Stadium Construction (debt) Expense, Front office/overhead, youth/reserve league expenses etc.... However, this thread is focus solely on revenue. Educated guesses on the average revenue per club: Average NHL revenue: $80-90 mil Average NBA revenue: $120 mil Average MLB revenue: $140 mil Average NFL revenue: $200 mil Soccer leagues: J-league: $10 mil Mexican Football League: $25 mil La Liga: $80 mil EPL: $130 mil Will MLS reach $20 mil in revenue per team (on average) in 10 years time? If MLS team can get just 1/4 of an average National Hockey team, it would be great. Expect MLS to close the gap on the Mexican Football league within 15-20 years in term of revenue.
Again, the single entity structure makes this tricky because the national TV revenue, national sponsorship revenue and 30% of ticket revenues are retained by MLS, which, in turn, pays most of the player salaries (excluding DP payments over $400,000.) Those numbers won't show up in club revenues for MLS, but do for every other league in the world. That said, here are the revenue projections for Kansas City in 2008 had the new stadium been built: REVENUES Ticket Sales, net $2,873,000 [represents 70% of total ticket sales revenue; assumes 19 home dates at 12,000 paid per game at an average ticket price of $18] Sponsorships/broadcast, net $2,050,000 [note, national broadcast and sponsorships dollars retained by MLS] Merchandise [Team merchandise sold during games], net $86,000 Rental Income $945,000 [assumes 6 concerts, 6 other events and 4 other soccer games] Luxury Suite Premiums, net $502,000 [assumes 17 suites at net of just under$29,500 each] Club Seat Premiums, net $258,000 [assumes 1,000 seats at net of $258 each] Concessions, net $1,018,000 [assumes a range of $3.50 to $6.00 per person] Catering, net $184,000 Merchandise, net $45,000 [assumes revenues for non-MLS soccer, non-concert events] Parking, net $1,070,000 Naming Rights, net $800,000 Total Revenues $9,831,000 If these numbers are accurate, and assuming the margins in LA are comparable, if the Galaxy reach 25,000+ paid per game and get a lucrative shirt sponsor, they might make it in the next couple years.
I sincerely doubt that teams like Kansas City, Colorado, NYredbulls, and New England are actually making any profit. Even the fact that NE plays in their own "rent free" stadium does not necessarily means they are breaking even or making profit.
You got that right man. If it was not for our dear RED BULL energized drink, we would probably be drinking RC soda.
Yes, MLS will hit those numbers in that time frame. Why? The league is learning that there are many ways to make a buck... Owning your facilities and renting them for concerts... Kit sponsorships... Stadium naming rights... TV deals... Youth academies... Sales of discovery player contracts... Attendance will eventually average 20,000 across the board, but it may take ten years to get there, but that's okay. Paid tickets will be in the 15,000 to 17,500 range, which isn't bad. A few more megabucks owners are needed for expansion teams so that we can really fully implement the "Beckham Rule" which will improve the overall appeal of the sport on the pitch, but especially on TV. The goal must be: One marquee player per team, no matter what. They don't all have to cost megabucks (Carlos Ruiz), but each team needs that central identity to make them worth watching.
Let's change this a little bit: One marquee player IN THEIR PRIME per team, no matter what. Also, revenue will be no fun for Los Angeles if they have to foot a 9.5 million dollar bill to foot each year (MLS isn't covering all of His salary).
Eh, I'm not buying the marquee player in their prime thing. A Zidane or Beckham today is better than a Rosicky or a Lahm in their prime really. How many people would be rushing out for season tickets for those guys? And I think Zidane and Beckham today would impact the quality of play more than many players in their prime.
NO. Not $20 million per club. Although there will be a couple of clubs that reach that figure. For example, I think LA Galaxy will hit that number this year if they get the right shirt sponsor. And New York and DC will have a chance once they move into the new 25,000 seat stadiums. But the teams that are building 20,000 seat stadiums have no chance unless they expand. Or unless TV revenue increased dramatically. Example: The Chicago Fire have a 20,000 seat stadium. If they can sell it out for 18 home matches at an average ticket price of $25 the total revenue would be $9 million. Granted, they could raise ticket prices. And probably would if they are averaging sell outs. So maybe they can get to $10 million in ticket revenue. But they would still have to find another $10 million. And other stadium revenues, merchandising, and shirt sponosorship are not going to get you there. The good news is that MLS clubs have operating expenses believed to be less than $8 million per club. Which means the outlook for league profitablity look very good.
Yeah, but there's such a bad aftertaste, you practically have to scrap a film off your teeth after you drink the stuff.
No question this is true. If Garber's comments before last season are accurate, only the Galaxy and FC Dallas actually made money, but several others playing in SSS, including Columbus, are "close" to running in the black. Keep in mind though, when "revenues" are listed per club on something like the Deloitte "Rich List", it refers to gross revenues, not net revenues. Even clubs listed among the 20 richest in the world can, and do, lose huge amounts of money on an annual basis (see Chelsea). Still, if you are making an "apples to apples" revenues comparison of worldwide clubs and you include all ticket revenue and a pro rata share of national TV and sponsorship revenues (retained by the league to pay salaries but retained by clubs in other leagues), I think many MLS teams that control revenue from their own stadiums are not that far away from $20 million in gross revenues now -- stadium revenue streams alone are worth between $4 and $5 million in the Kansas City projections.
Now? I doubt it except for L.A. this season. Though LA will have a $10 mil bill for Beckham salary. I don't think Chicago and Dallas reach $12 mil gross revenue yet. In that K.C. projection, it's $9.8 mil in net revenue for 2008 season with a stadium. Net revenue is not that different from gross revenue in that KC projection. For parking, just take gross revenue minus the attendant personnel salary. Same with ticket revenue, minus the ticket booth personnel, ushers etc... Anyway, this thread is about the average club. If an average MLS club (in the middle of the pack) can hit $20 mil a year in revenue by 2017, it would be great.
Yes, but again, if you are trying to gage MLS revenues at a club level in order to compare them to other clubs in other parts of the world, you have to adjust for the single entity and plug back in those revenues MLS clubs ship to the league that otherwise would generally be retained by the clubs. For example, if every team received a pro rata share of the $20 million in national TV contracts (freely acknowledging there are many different formulas worldwide for how TV revenues are allocated, if they are allocated at all), that adds $1.5 million to the KC totals. My guess is some partial sharing of the national merchandising would add again as much. Next, plug back in that 1.3 million of ticket revenue packed off to the league office, and you would have another $4.5 of revenue at the club level, even with the KC numbers. (Finally, remember that the KC study was before MLS changed the rules on shirt sponsorship ads, so those revenues are not included either.) Again, if you are trying to make a comparison to clubs in other leagues, an MLS team in a SSS that really gets 12,000 paying customers per match (and many don't) is generating the equivalent of $14 or $15 million in revenues. If Galaxy can double that at 24,000, or get huge dollars for the shirt sponsorship, they would hit the $20 million mark, or very close to it. You are correct though, only the Galaxy currently draw enough paid fans to do it.
Another thing to consider... as MLS teams move into SSS which they either own or manage, MLS teams now receive revenue from non-soccer events. For example, under the proposed plan for San Jose, the Quakes would get 50% of non-soccer and non-SJSU events, such as concerts, trade shows, etc. The financial details of RSL's stadium showed them relying heavily on revenue from non-soccer events to turn a profit.
I say yes, we'll get to 20 Mil rev. Maybe even in 5 years. I think LA Galaxy will get there within the next 2 years...
Very interesting, thanks for posting. How or did you get these figures? I wonder how much the MLS will get for TV rights from other nations in games when Beckham plays? You would tend to think they should capitalize his presence and make quite a profit. I read that even China has to start paying $30.00 for EPL match packages. You would wonder how many would buy Galaxy matches?