Skip to main content

More franchises in the loss-making MLS

A new MLS season is upon us and if you want basic details about the teams (sorry franchises), sponsors and TV contracts, you can find them here: Commercial guide

By 2022 the competition which had 24 franchises last season is expected to have 30 teams. Any expansion beyond that, given that relegation is out of the question (it would scare off the investors), would presumably require two 'conferences' and play offs between the top teams, as happens in baseball.

Buying a franchise now getting very expensive, even though hardly any MLS teams have turned a profit in the last 25 years, but then normal profitability criteria do not apply in soccer. David Tepper, a hedge fund billionaire, paid $325m last December for the 30th franchise in Charlotte, North Carolina. You could get a half decent European team for that price. MLS is open only to new entrants willing to pay 'expansion fees' which are then shared between existing owners.

Last year Meg Whitman, the former Hewlett-Packard and eBay chief executive, paid $100m for a 20 per cent stake in FC Cincinatti, valuing the club at $500m. Half of the 20 per cent Cardiff City owner Vincent Tan held in Los Angeles FC was recently bought out, giving the club a valuation of over $700m: LAFC

MLS commissioner Don Garber insists that the profits are coming saying that franchise owners were in something he called 'deep investment mode' undertaking tasks such as building stadiums. They were willing to sustain losses as the MLS grew.

Writing in the Financial Times Muran Ahmed noted that European leagues are significantly higher in quality and offer better wages to entice the best players (the MLS has player salary caps). US television ratings for EPL matches consistently beat those for MLS games. Since 2000, no MLS side has even won the North American version of the Champions League which has been dominated by Mexico's Liga MX.

What would a franchise system look like in the UK if population was the main criterion?

This involves some big assumptions as city boundaries do not reflect those of a larger urban area. I have paid some attention to football history and given London six franchises; Birmingham two; Manchester two; Liverpool two; and Glasgow two. These are also largely justified by population. The remaining sixteen franchises (one each)would go to:

  • Bristol
  • Sheffield
  • Leeds
  • Edinburgh
  • Leicester
  • Coventry
  • Bradford
  • Cardiff
  • Belfast
  • Nottingham
  • Hull
  • Newcastle
  • Stoke
  • Southampton
  • Derby
  • Portsmouth

Five of these cities in the above list have teams in the Premier League (two are not eligible). The Americans would probably give more weight to expanding, prosperous areas, so Brighton might qualify for example.

Comments

Popular posts from this blog

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion.  Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs.  An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site.  He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned.  He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long.  What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do