is committed to transparency, including provision of detailed methodology and sourcing information below. For any additional questions, please contact sports valuations reporter Kurt Badenhausen at firstname.lastname@example.org, who led in the composition of this report. Sports finance reporter Brendan Coffey assisted.
Fair Market Franchise Valuations
To derive the fair-market value of the 27 current MLS franchises, Sportico
calculated each team's revenue, relying on publicly available information and financial records—and interviews with those knowledgeable of team finances, including seven sports bankers and attorneys who actively work on MLS transactions. We traded candor for anonymity. This information was vetted by most team or parent company CEOs, presidents, chief financial officers and media relations personnel, as well as industry experts and investors.
Revenue totals were then subject to a team-specific multiplier, which, based on interviews with multiple sports bankers, remains the only reliable manner by which transactions occur, due to dramatic fluctuations of earnings before interest, taxes and amortization (EBITA), year-over-year, based on player spending and special expenses.
The team-specific multipliers were based on multiple factors, including: historical sales, market (size, saturation and interest by prospective owners), strength of brand, on-field performance (historical and recent), terms of facility lease, debt burden and additional obligations, as well as expected future team and league economics. The average multiple was 12. Last month, Houston Dynamo FC was sold for 13 times revenue, and the sale of Orlando City SC, which is expected to close in July, values the team at roughly 10 times revenue.
Revenue was calculated based on analyses of data from industry sources and reports, as well as interviews with experts and those with knowledge of team and league finances (detailed below); together, this comprised hundreds of inputs of confirmed and estimated information from dozens of sources.
Given the business disruption posted by the coronavirus pandemic, we calculated revenue for the 2019 season (the last to be uninterrupted) and applied the multiples to those figures as a baseline. Direct multiples of Sportico
's calculated revenues for the 2020 season, therefore, were not used for this purpose.
For teams that did not exist in 2019—Inter Miami and Nashville—or moved into new stadiums in 2021—Columbus and Cincinnati—or both of those conditions in the case of Austin, we calculated what future annual revenue streams would look like. This is also the case with Chicago, which moved back to Soldier Field for the 2020 season. Sportico
also adjusted for significant new sponsorships, like San Jose, which did not have a jersey sponsor in 2019 but signed a deal with Intermedia ahead of the 2020 campaign.
Team Review and Comments
Almost every MLS team or their parent company participated with Sportico
by providing or validating at least partial information. Every franchise was provided the opportunity to review and comment on Sportico
's tabulations of their financial results.
Government, Financial and Industry Sources
To assess team-owned real estate with consistency, Sportico
included government property appraisals. Sources included: Adams County Assessor's Office (Colorado); Cobb County Board of Tax Assessors (Georgia); Collin County Tax Assessor-Collector's Office (Texas); Cook County Assessor's Office (Illinois); County of Morris Board of Taxation (New Jersey); County of Santa Clara, Office of the Assessor (California); Delaware County Board of Assessment (Pennsylvania); Franklin County Auditor's Office (Ohio); Hamilton County Auditor's Office (Ohio); Loudoun County Property Assessment and Tax (Virginia); Montreal property assessment roll; Orange County Property Appraiser's Office (Florida); Ramsey County Assessor's Office (Minnesota); Salt Lake County Assessor's Office (Utah); Town of Foxborough Assessor's Office (Massachusetts); Travis Central Appraisal District (Texas); Wyandotte County Appraiser's Office (Kansas).
Team and league financial information was derived from industry data sources, including the Association of Luxury Suite Directors (for club and luxury suite capacity, occupancy and pricing); Team Marketing Report (fan spending and sponsorship information); individual team and sponsor websites; each franchise's 2020 or 2021 media guide. Chris Bigelow, founder of foodservice consultancy The Bigelow Companies, provided expert guidance on per-caps and concession revenue at MLS venues.
Additional financial, corporate and structural information was derived from the MLS-MLSPA Collective Bargaining Agreement
; and through analyses of historical team sales over the last five years, based on Sportico
spoke to more than 60 people to compile these valuations.