I found this article helpful in understand how the MLS operating model works. Major League Soccer has a complicated business model. This is an investigation into how it works. How does MLS make money? Where does the money go? How is it structured so teams compete with each other, but also succeed together? I hope to answer these questions and more. The foundational information for this article was gathered from public sources and news articles listed below— there’s no insider information here. Just a reasoned investigation of what makes MLS succeed where so many others have failed. Read on...
Of note: since the article was written, the 25% Providence Equity share of SUM was bought back for $300M, implying MLS values that operation at around $1.2B.
Excellent article, good find. (It does make me feel dumb though reading it, almost like you need a PhD in economics to fully grasp MLS' business model.)
For future reference, do you have a source for that which you can share? ... The author and this thread are well worth the click of the rep button, thread bump and possible discussion. Despite following MLS for over a decade now this is one of the best explanations I have come across how it all works and you don't need a PHD, as stated above.
"The recent sale of Providence’s remaining 20% stake – its holding had been diluted by the league’s expansion – was for a little over $400 million, valuing SUM at more than $2 billion, or a nearly 250% increase over the last five years". - Forbes @CoronaOrange @The Franchise
Good find. The amount I'd been thinking of was the increase in value of Providence Equity's share, not the total sale price. I had also incorrectly assumed league expansion had only split up the part of SUM that MLS owners held, rather than apparently affecting the whole pie, slowly shrinking Providence's share as well. The combination of these two means SUM's total estimated value had increased by five times, not three, since their investment.