No offense, but how can we predict with any confidence the profit and loss of a team, without knowing their accounting or having ever seen their books? What is the % breakdown of league revenues to each team? What is team expenses and what is not. Etc.? Just saying, having that kind of info in this thread would go a long way to at least providing some realiabilty in our assestment.
Their rent for Giants Stadium sucks. Their rent is quite high ($175K a game is what I was told by their fans), and they see little to no cash from concessions or parking.
I'm not looking for a balance sheet and income statement. I'm looking for newspaper articles quoting someone within the team or organization saying they were in the black.
Once again, of course MLS teams are going to say they are in the black. They want the media, fans and sponsors to think they are profitable. And that is when they are talking about the financials. No MLS team talks about that stuff in detail. They are all obscure references to percentages and stuff like that. You can't just guess at this, you need to see the actual books. This might be the most useless thread ever. Well, besides the promotion/relegation thread and the only abolishing the playoffs.
RBNY will remain in the red until Red Bull Park opens. They have to pay $200,000 per game to play at Giants Stadium with no cut of revenues from parking or concessions. In fact, they only get a percentage of the gate revenue, so they've pretty much been running the team at a near-total loss, just as AEG did as owners of the team before the sale to Red Bull. Once the stadium is built, however, the team will nearly instantly become profitable. That's why Red Bull is sticking it out.
Actually, it benefits a private company to not announce profits, especially in a business like sports where Collective Bargaining efforts with the unions tend to be very public affairs. Baseball owners cry about how much they lose every time the CBA comes up, yet there's no shortage of billionaires wanting to buy into baseball. If the books aren't on public record, always assume that a business makes more money than it claims in public. Even when they show you how much they've "lost," you'll always almost see missing assets, like increase in franchise value. A good barometer for how profitable an organization is, is how many rich men are interested in investing in it. In the case of MLS, things were pretty dire about 6 years ago, but right now, investors are popping up everywhere and are practically knocking down the doors to get in. I don't doubt that DC and RB, the teams with the worst leases, are losing money, but in a single-entity structure, even their losses drop each year as other teams become profitable.
Great post. I was going to say that I did a rough estimate myself and i got ticket revenue to equal around 10M including luxury boxes, so i think that's a pretty reasonable assumption. Other things working in our favor: -Merchandise is selling at a rate that is 2nd highest league wide -BMO jersey contract pays something like 1M a year -Richard Peddie (MLSE big wig and general douche) stated that all TFC tickets were sold, none were given away as a part of promotions etc... Logically this team has to be at least breaking even. The team did it's first year projections based on selling like 20% of the merchandise they actually moved and average paid attendance of 13 or 14K. At this level MLSE predicted a moderate loss. Most large first year costs will be capitalized and spread out over time. The revenue sources have been way above projections. Evidence strongly supports breaking even
That barometer doesn't usually work for sports. The ultimate dream for many Americans is to own a professional sports franchise. It is because these men are rich that they are capable of operating a sports team. They are willing to take smaller profits for the thrill of owning the team. There are much better ways to spend millions if all you are looking for is profitability.
maybe, but most of these guys aren't looking to dump money into a sports team either. If your theory was true, where were all these guys wanting into the league 6 years ago when it was in serious financial trouble?
Sanguine is on the money. That is why I am saying that you will never really know who is profitable and who is not. It's a big game. They don't want the public to know, and in doing so, they can keep certain costs low (i.e. salaries for players and staff). The league was in big trouble back in 2001 and it is much better off now.
Good post. The fact that their is such great interest in the league shows how positive the economic outlook of the operation is. As you correctly mentioned, the reason AEG owned so many teams back in the day was because nobody wanted them and they were trying to keep the league afloat. Soon they will be down to 1 team. I think that says alot. MLS will probably never give the media anymore then "we're barely profitable" because as you correctly point out they are always thinking about what effects their statements have when its time for the CBA to be renegotiated.
TFC is running in the black based on my beer consumption alone--it's $12.75 a 24oz cup for God's sake. Seriously, the MLSE has a favourable lease at the stadium and recouped any costs it put into the team/stadium through the naming rights and jersey sponsorship deal with BMO. With close to every seat sold all year, and massive line-ups at the merchandise kiosks during every game it's hard to imagine how TFC lost money. And, even if it did, MLSE can just draw some from the bank of the Toronto Maple Leafs or Toronto Raptors.
Rich people don't get rich by burning bricks of $100 bills. While some rich types can be foolish and blow their cash, those who know what they are doing can see a sound investment from a cash drain.
Here are the teams who I'm sure made a major profit compared to teams last year IMO: LA Galaxy: Kinda obvious. Plenty of 27,000 sellouts, jersey sale revenue was probably mind-blowing, about to make a few million dollars in exibitions next month overseas, etc. Chicago Fire: Same thing with the sellout crowds and the jump in merchandise. Toronto FC: Sellouts, mad merchandise, tv deal for an entire country instead of just local. And they did all that without spending money on a DP. Colorado: new stadium, new revenue, steady crowds all year, and didn't spend money on DP FC Dallas: Have their own stadium. Had a few big crowds, but what sticks out with them were how many more games and events they had at their home stadium than any other. Open Cup (all the way to the final), Superliga, regular season, and national team exibitions all took place at Pizza Hut Park this year. ---------------------- Imagine the revenue streams in MLS in 2010 or 2011 when at least six or seven more SSS will be built and will be established. RSL, RBNY, Houston, DC United (especially DC), San Jose, possibly St. Louis and Philly, as well Seattle playing in a rent free stadium, and others may have one as well.
And there you have it. MLS clubs can claim to lose money, but their corporate tentacles have multiplied. Its like the Revs paying money to the Krafts for use of Gillette Stadium - just moving $$ from one pocket to another. Seeing the followup posts has me utterly convinced MLS making a lot of money. I will add one more point. MLS used to have a business model that minimized expenditures. Now, they realize to make money, you have to invest. Owners have done this by getting stadiums built and investing in DPs. The ROI is there; its real. The owners see the special events (concerts, WC qualifiers, friendlies), the control of all $$ spent.
Of course, there are only two ways to increase the value of a franchise -- a) better return on investment, and b) selling to someone who thinks a franchise is a huge ego boost. I'm not sure MLS can count on b in the near to middle term, so it seems the profitability is the only route to greater franchise value.
So...um...does anybody actually have any numbers or data to back up any of the claims in this thread? Also as others have said, would the groups in MLS actually release the real numbers? (Most values we hear about in the US are significantly skewed and the actual profits are hidden in television stations or other investments.) For example, regarding DC United and RFK, it is always said that it costs about $100,000 for the rent on each gameday and that hurts the team, but I haven't heard anything recently that would have me to believe the team makes no money because of the stadium. RFK may have put DCU in debt, but I'm inclined to believe it minimizes their profit now. If DCU owned their own stadium(which would be worth more than the team), the money they would collect on tickets, parking, concessions and all of that would maximize profits for the organization. I could be completely wrong and off base, but if anybody has legitimate financial information from any of the teams I would like to see that in this thread.
I'd be shocked if Kraft Soccer didn't make a profit this year. Lower payroll, an increase of over 5,000 per game in a stadium they own, and a sell out for a game that they charged a killing for. Some of the salary was even offset by allocation funds. Yeah, I know MLS owns the player salaries, but the Revs ownership had a pretty good balance sheet to look at this year.
Sorry, but either the team is losing money or management is a bunch of lying bastards: Washington Post: Without a new stadium, this team will continue to lose money, true? Victor MacFarlane: Absolutely. A lot of money. Kevin Payne: We're going to get a stadium. Victor MacFarlane: The sooner the better. http://blog.washingtonpost.com/soccerinsider/2007/10/macfarlane_speaks.html
Mid-season article: http://www.nytimes.com/2007/07/08/s...rss&adxnnlx=1183867432-g4GS9/6SEXgGj0Gbyth5lA If TFC was expected to turn a profit at the half-season mark, with continued sell-outs I'd say it was accomplished.
Another way to consider the Toronto situation is a simple appeal to logic. There is no way the ownership would have become involved in a situation where they could not turn a profit even if they sold out every game. The team is selling out every game. Thus, the team must be turning a profit.