Yes, the expansion fees are one-time, occasional payments. Nobody In MLS is counting on them as an ongoing revenue stream. Even for teams like DC United, that's been around since the beginning, expansion fee revenue is nothing more than a way to offset the losses the team has incurred throughout its history. And how does adding a team in, say, Nashville, harm Columbus or Colorado? Those are separate markets. If Columbus is struggling to make money, that has nothing to do with expansion of the league.
I give up you are right when can we expect a national tv deal? have to think with the league booming like this now is the time to capitalize. I mean I know they are currently in a terrible deal that is only in the millions but it ends in 22 so what do you think mls could get? the NBA is getting 2.6 a year that would seem to be a good comparison right? I mean how big do you think the deal could be.
Does anyone know what the dollar amount of increased MLS spending for each year? Once we have that, it would be interesting to see how big a number expansion fees are of that annual increase by year. If it’s a small percentage of that number, it would show that expansion fees aren’t a big deal financially for the league.
I understand now. The ponzi scheme isn't against the new owners they are a knowing part of it. they invest knowing the value will go up on future expansion of the league. This is also why they call atlanta mls 3.0. When they paid in their money investment immediately grew in value. Now the four teams you named are the odd teams not the bulk of mls which is struggling with day to day costs and have been adding on operational losses year after year. the reason nobody cares about losses on a yearly basis is that it all goes into one pool the single entity. you are thinking about the teams like nfl teams don't do that. they are thinking about what a brilliant investment they made the value of their part of the single entity increases regardless if their team wins or not.
I am just trying to explain it to you by making it clear. so let me ask you this then so mls teams outside of the galaxy..whose financials you have never seen are losing money over their lifetime. so name a business that can withstand 15/20 years of losses and still be doing well. I explained how the marlins owner did it but you said that isn't it. The other poster even talked about how teams are investing hundreds of millions of dollars in straight losses...we know teams aren't getting revenue anywhere near that. DC United got a new stadium mostly paid by the city/county but are adding training facilities and invested hundreds of millions of dollars they couldn't get a tv deal so are now getting pennies from flosports as their digital provider instead of a local tv deal. how are they surviving with these losses? three years in a row with over 100 million in losses will hurt even a billionaire especially if their hope for a magical popularity growth. mls does have to improve and if you think keeping long around for another year is going to be that difference making improvement in the talent level...well I would like to sell you a usmnt jersey with their first star on it from their world cup victory last year. The key for a team like njrb is to sell players and invest in getting better players holding onto a player today isn't a difference making act. the red bulls got beat by a nwsl match last week with long he isn't putting butts in the seats or eyeballs on the screen. the next player is the important one because the red bulls could disappear today and it wouldn't even get on sportscenter.
@MPNumber9 @gogorath does this change your view at all? ✍️😎Welcome, Alex Mendez! 🇺🇸— AFC Ajax (@AFCAjax) July 30, 2019
Well, we don't know what the losses are (they are clearly exaggerated by the league) but these are rich guys. They lose a couple of million each year and get a nice toy to play with; if I was that rich, I'd do it. How you can tell it's not a ponzi scheme is that the league is insisting that new entrants make capital investments. Stadiums are expensive to build. Academies are money losers now and probably for the near future. If the goal was to maximize expansion fees, the leagues would tell the teams that they can play anywhere and take part of the money the team would save in an increased expansion fee. The business model is pretty clear. High up-front costs (stadiums, expansion fees), control annual expenses to keep annual losses small, wait for the value of franchises to rise as soccer becomes more popular in the US, and enjoy being a team owner in the meantime.
Congrats to the kid, it's a good environment to develop in. I'd be interested in hearing the story as I thought he was already signed to a pro contract. Was he sold or do youth contracts work differently?
Here is a pretty good analysis by Sporting Intelligence. This estimates league revenue at $32 mln per club EXCLUDING expansion fees in 2018 or a total of $736 mln across the league's 23 teams. The Article states: "MLS teams were collectively losing $100m a year as recently as four years ago and remained in the red in 2015. But data obtained by Sportcal and detailed in ‘The Business of MLS’ (cover below, right), published on 12 June 2018, indicates the league has moved into profitability. Team revenues now average around $32m and rising. Crucially this includes a share of the annual surplus from the central funds of the now-profitable MLS – with substantial increases in the pipeline." So the league is profitable, according to their information ON AN OPERATIONAL LEVEL. However, it does state that over the next five years the teams can expect to share in $800 mln in expansion fees (which would have included Cincinnati's fee) or an average of $6.4 mln per team/year. Total salaries in 2018 were $261 mln or roughly 35.5% of total operating revenues. We won't have year end figures for 2019 for a few months, but as of the beginning of the year total guaranteed wages had risin to $276 mln for 24 teams vs 23 teams in 2018. Assuming revenues remain the same that would be roughly 36% of league revenues (again, excluding expansion fees). That also does not include player acquisition costs. Transfermarkt isn't always all that accurate, but they estimated that overall expenditures totaled roughly $90 mln in 2018/2019, which was up over 50% vs their estimate for 2017/2018. I think it is safe to assume that player acquisition costs will continue to rise and based on the players being added midseason, I'd estimate the final guaranteed salaries to be in the neighborhood of $290 mln or so. You also have to consider the tremendous outlays that teams have made for infrastructure. 14 new stadiums have been built since 2010 (15 if you include Atlanta). I haven't compiled the numbers, but I'd guess close to as many new academies/training facilities have been added. Literally billions has been spent on soccer specific infrastructure in this country over the last decade with more new stadiums/training facilities planned or underway in Cincinnati, Miami, Nashville, and Columbus. All that said, I'd definitely like to see salaries continue to increase in the next CBA. Especially considering the national TV contract will be renegotiated in 2022 and the league is also collectively marketing local streaming rights. https://www.sportingintelligence.co...join-worlds-top-10-leagues-by-revenue-120601/ https://en.wikipedia.org/wiki/List_of_Major_League_Soccer_stadiums
I was under the impression that he and LLanez signed a monthly deal that paid them little but gave them flexibility to move/sign a better deal.
Thanks! Anyone scoffing at $150M per expansion team for a league that has a total of $736M is nuts, IMO. That's a huge number and one with very little associated direct cost. If two teams are added (as another poster wrote), that's a third of the total revenues. If salaries league wide are expected to increase $30M per year as you calculated (and I have no reason to question it given my lack of knowledge), the expansion fees are a huge part of that, IMO.
Sure, but don't ignore the fact that the article I linked also states that the league is now profitable without them. If you take the time to read the article, their analysis is pretty detailed and this is a group that looks at leagues across the globe on an annual basis in great detail. The league is not, as others have stated, losing money and increases in player spending is not reliant on expansion fees.
Basically none of this is accurate. As the article I linked noted, the league is now profitable absent expansion fees. That said, many teams did incur losses until recently. The owners, especially guys like Hunt, Anschutz, and Kraft likely did so with the belief that the league would ultimately survive and thrive and it certainly appears to be headed in that direction. Further, you'd have to believe that now that the league is profitable at least a portion of the entrance fees being paid now are going back to those early owners to reimburse them for funding operating losses. They also benefit by reaping the reward of increased team values.
An initial read-through didn't show that MLS is profitable without the expansion fees but rather that the $32m/team excluded the expansion fees. Maybe I read it too quickly. What the report shows me is that they have a long way to go to match the big 4 but good progress is being made. I was also impressed by the uniform revenues increasing from $25M to $117M - that's huge. I'm also happy to hear that TV revenues are expected to increase as I heard rumbling of declining TV ratings for MLS.
Google translate from the article..... Ajax has reached an agreement with Alex Mendez and SC Freiburg about the immediate transfer of the player to Amsterdam. The midfielder signed a contract that will take effect immediately and has a duration of three seasons, up to and including 30 June 2022.
"Expansion fees are paid by new clubs joining MLS. The Sportcal analysis excludes them because expansion fee revenue is finite and will continue only until the 23-team league reaches 28 teams." Seems pretty clear me, but I suppose I could be wrong. Would be great to see the full report, but I'm not paying $1,500 to buy it.
All of the bolded statements are outright wrong, or are total non sequiturs. Where are you coming up with this stuff?
1)the article says the league is profitable(sort of) 2)it doesn't say every team or even a majority of teams are profitable or have been the irony is you then going into what I've been saying...expansion costs are going into paying old owners 'profit' that is manufactured as a result of new money entering the league...that is what a ponzi scheme is. When the stock market was booming bernie madoff wasn't entirely running a ponzi scheme even though he was take huge chunks off the top because market gains and the new money easily covered for the few people wanting to get out. When the market crashed and he stopped getting new investors he couldn't pay off the dividends people were expecting.
According to bshredder, they will be making coin due to Eredivisie minimum requirements. I am interested in hearing from those who thought that it was "irresponsible" for an agent to suggest that they not sign a ~$80K/yr contract with LA Galaxy.
you are entitled to be a DCU and MLS fan over the USMNT but it's odd that you're in this forum to tell others who think differently what you think. It would be like a USMNT fan going to the MLS forums and saying the opposite of what's being said here. If most DCU fans thought the way you thought, I'd think that USSF would encourage youth players not to go there.
I'm in a thread discussing the relationship between MLS and the USMNT. Why is it odd that I have an opinion that is different from some other posters on here? And there would be nothing wrong or offensive about a national team fan opining in the MLS forum that MLS needs to focus more on developing national team players. I've had some negative experiences with the American Outlaws at national team games at RFK and Audi Field. There is a certain subset of that fan group with a sense of entitlement about their relative position in US soccer, and where they stand in the relative hierarchy of fan support for soccer in this country (i.e., they want MLS fans to defer to them).
Fair enough wrt the topic. I would never go to the MLS section and tell them that they need to be subservient to the USMNT as I don't even agree with it here in this forum. I do think that MLS has way too much influence on the USSF but that's not this topic.
To be more specific, I'm ambivalent about the direction the USMNT has been going. There didn't seem to be any sense of urgency or crisis after 2018, and it just seems the USSF reshuffled some positions at the federation, but never really engaged in meaningful reform. I was also put off by the high ticket costs for the recent friendly at Audi Field, where we got to see an experimental, barely coherent team lose to Jamaica. I'm not a big fan of being treated like an ATM for the team. Basically, I'm not really confident that the USMNT is heading in the right direction.