To keep a final promise (before I cut back here), I am posting my detailed rebuttal to by Stefan Szymanski’s recent post about MLS. It’s a lot of material – I have to break it into several posts – but I have gone into some detail because I wanted to preserve a lot about MLS that YBTD posters have pieced together through good detective work over the years. If you missed Szymanski’s post, here it is: http://www.soccernomics-agency.com/?p=692 Having projected MLS to be losing significant amounts of money, Szymanski concludes: “But now MLS starts to sound like a pyramid scheme. You can fund a loss-making enterprise from the entrance fees of new buyers for a while, but without making money, the only reason for doing this would be glory, not profits. Americans constantly tell me that owners of sport franchises in the US will insist on making money. If that really is the case, then I predict that MLS will collapse, and probably sooner rather than later.” It’s a bold claim, and to his credit, Szymanski does at least attempt to check his work by comparing his estimate to the estimated MLS team revenues published by Forbes in 2013, which are far higher. For those that missed it, Forbes estimated that in 2012 ten MLS made money, one broke even and eight teams lost money. According to Forbes, total revenues for all 19 teams averaged $26 million, with a median of $24.2 million. http://www.forbes.com/sites/chrissmith/2013/11/20/major-league-soccers-most-valuable-teams/ Unable to reconcile his own low revenue estimate with Forbes’ much higher numbers, Szymanski instead dismisses the Forbes estimates. He writes: “So that gives us [really him] an estimate for total [MLS] revenue in 2014 of $233 million. In 2013 Forbes published estimates suggesting that league revenues were in fact $494 million - I find it hard to see how they got that and they didn’t respond to an inquiry from me. However, they also said that operating profits amounted to $34 million, when MLS themselves say that losses exceed $100 million.” http://www.soccernomics-agency.com/?p=692 Now, to be fair MLS has claimed a $100 million loss in the run up to the CBA negotiations, and some MLS officials have challenged the specifics of some of the Forbes team estimates over the years, but even so, could the average MLS team have revenues of $26 million as Forbes estimates, or is the total closer to Szymanski’s $12.26 million ($233 divided by 19 teams) that he says makes the collapse of MLS imminent? Let’s look at another source. On November 5, 2014 Convention Sports and Leisure (CSL) delivered its report to the Council Chair for the District of Columbia. That report has a detailed pro forma projecting DC United’s revenues and expenses in a new soccer specific stadium starting in 2017. You can download the report from the District’s website: http://dccouncil.us/DC_Soccer_Cost-Benefit_Analysis_FINAL.pdf On page 45 of the report, CSL estimates that DC United will generate $27.475 million in revenue in 2017 – very close to the Forbes $26 million estimate. This isn’t a simple blog entry, CSL prepared this report for the District and had access to certain team and financial data that isn’t generally public. Having personally worked with CSL on a study like this years ago – I was part of a public private partnership that retained them to look at the feasibility of an arena – I’m inclined to think they did this work with similar care. The CSL study for DC United seems to suggest the Forbes numbers are a lot closer to reality than Szymanski’s own revenue estimates that, to him, signal the end of MLS.