that couples with a report that they didn't make quite as much as they thought they were going to because they factored in every game pretty much as a sellout. those are great numbers though. i wonder where they got them from. just barely making a profit isn't great but it's certainly something.
At least one team made a profit. Is this an operating profit or is this profit calculated when interest and depreciation expenses added? This is truly great news for the league. This year has been a very positive one for MLS. Obviously much work needs to be done, but overall the prospects for league survival are improving.
you would have thought the sentence was written clearly enough to understand... but i'll try again just the galaxy have made money over the course of a single season... what that means is that none, i repeat, none of the other teams have turned a profit over the course of a single season (that includes the crew) i hope you understood... let me know if i need to give an explanation for any word i might have used... season, single, crew, galaxy, course, etc.
The Galaxy only made a "profit" because it doesn't have to pay rent. That doesn't mean that AEG made a "profit" with the Galaxy and Home Depot Center combined when you take into account the construction loans that have to be paid off over time.
I think the goal is to use LA stadium for other events...for which AEG will receive $$$...and part/whole of that construction cost can be amortized... Look, I agree with the basic point that soccer specific stadiums are not HUGE money makes.....if properly managed (ergo, like Crew stadium...which holds football games, etc)...they greatly improve overall financial picture for club, bring stability......but unless there is something I'm missing, they are not huge money-makers, nor likely never will be UNLESS many more events are booked. At that capacity and so few dates, pretty hard to MLS clubs to make huge $$$ (given no big TV contract) But the issue here is, and for next 20 years...and as long as Uncle Phil etc are happy....is stability, and lack of losses, not huge profits.... The next wave (whenever that is) can expand these relatively simple stadiums when the demand is there....hopefully by that time there will TV money too (but don't bank on it)...likely MLS will have a very creative combination of revenue options which will make it a very cute 4th sport (still well below baseball, football, baskeball...but likely more financial viable than hockey)...over next 20 years....and that's OK.. Especially for us who remember cave-man years of 80s early 90s..
And it would've been about $10 higher if when I visited that damned line at the "Goalie Grill" moved quickly enough for me to actually order a hamburger after standing in line for 45 minutes and the taps at the beer concession would've been working. As it was, I made due with a bag of peanuts and some water I'd snuck in.
it gets better for aeg because of all the extra events they do there... tennis, international matches, cycling, track... you name it but this was about the galaxy... and who knows... maybe they do pay some rent to aeg for the stadium
If they are saying the "galaxy made a profit" I take it to mean a net profit. Meaning this includes either some rent number, or their allocated portion of the stadium costs. None of us know what that number is (unless any of us have their financials), but it wouldn't be a leap to assume that the Galaxy have some type of stadium lease/depreciation expense on their income statement. Just another point to think about, many "Big 4" sports teams operate at a loss, so making a profit, even if it's small is pretty good. Now most of the big 4 franchises can make up for any losses with the appreatiation of the club value, which MLS doesn't have at this moment.
Interesting to note that HDC profitability is not included in the Galaxy profit. Galaxy's season is over and they calculated earnings, but the stadium continues to have events. The MLS Cup should turn a nice profit for AEG.
Profit is a clearly-defined term. One deducts interest payments, but not principal payments, when calculating profit. Depreciation is deducted from profit, which is a way of factoring in the cost of capital assets over time. One can argue whether or not depreciation in this case fully reflects this year's portion of the long-term cost of building the stadium. Without knowing the team's internal accounting policy, I can't know whether they are using an appropriate depreciation schedule, but it is highly unlikely that they aren't depreciating the asset when calculating profit.
I took that statement to mean that even after the Gals kicked in their share of league operating losses (they have to pay 5%, 1/10 of half, of EACH TEAM'S losses), they made money. Because the Crew pay HSG to rent the stadium, it's gonna be hard for them to make money after their share of league losses. Hell, the Gals only made $150K. With the Burn back in the Cotton Bowl, if they didn't get a better lease than they had, it'll be harder for the Gals to make money next year.
But what KIND of PROFIT are they talking about? For example, Amazon.com makes an operating profit (or whatever the technical term is) cuz that type of profit doesn't factor in the costs of the debt. Essentially, they could be spending $2 for every $1.02 they bring in and be making .02 operating profit cuz a $1 of that money spent is on the mortgage for the new stadium.
Yeah, right. You could go mad trying to figure profit/loss on a sports team. They do lots of tricks like depreciating the players over the estimated span of their playing careers. Does any of this figure in the Women's World Cup or the other events held at the HDC? Is the Galaxy charged a fair rent or is it inflated to cover the costs of building the HDC? I would take statements about making a profit or a loss with a grain of salt, especially if the team in question operates the stadium.
I sort of disagree. I don't know what you mean by "HUGE" money, but there's a lot more revenue to be had than just ticket sales. Taking the Crew example, suppose that instead of bringing in 16,000 a game they were consistently packing in 22,500 with thousands more wanting to get in. Of course the 6,500 extra tickets per game should get you a profit, but not, as you say "HUGE" money. Obviously the limited supply and high demand would lead to higher ticket prices, and therefore increased revenue at no expense. The big difference, though, is sponsorship. Notice all the advertising in the stadium? Those sponsors pay a lot of money to get those there, but would pay much, much more if the Crew were the hottest ticket in town, with many more fans being exposed to such advertising. Then your TV broadcasts start making a profit. Then your merchandising sees increased revenue. And so on, and so on. Crew stadium, and other SSSs have a lot of room to grow and make a lot of money--without having to expand physically.
Why would you say they don't pay rent? Granted, they probably have a favorable rent but even when AEG allowed a Kings fan to inspect their books a few months ago, it should that the Kings paid AEG rent for use of the Staples. I can't see the deal at the HDC being much different.
The league had always given the impression that the Crew was the one franchise that ended each year in the black. So once again, MLS is reverting to double-speak.
Exactly. AEG has many divisions, their teams, their real estate, etc. I'm 99% sure that the Galaxy pays rent at the HDC. I'm also sure that when they are referring to profit, construction of the HDC will have nothing to do with it. That would be under a totally different wing of AEG. What this means is that the "LA Galaxy", was able to make enough money in endorsements, ticket sales, merchandizing, (maybe a take of concessions at the HDC?), to cover their costs, and even have a little bit over. That's a huge deal. I think we could count the number of NHL teams in the black on one hand right now (the Senators were first in the league, and they were bankrupt). As it was mentioned, their are many many EPL teams that have dug themselves into a nasty hole of red ink.
Technically, no team pays rent. Leases are a contracted between the league and the owner of the facility and are league overhead.
I don't think so. I've always taken the phrasing as saying the Crew make a profit as a stand-alone entity, but lose money after they are assessed their share of league losses. (Of course, they still can make money for Lamar, if those losses are less than the rent the Crew pay to HSG.) That's why I said this article makes it sound like the Gals make money even after their 5.1% share of everyone's losses. I wish people would stop taking, as their default position, that MLS is lying or screwed up. It's the cynicism of a college sophomore.