The podcast delves into the controversial valuations of Major League Soccer teams, specifically focusing on LAFC's impressive valuation exceeding $800 million. The discussion explores the potential collaboration between MLS and Liga MX to challenge European football dominance. Additionally, it highlights the shift towards valuing athletes over clubs and the rise of North America as a new football hub, emphasizing sustainable business models and investment trends in the sports market.
MLS franchise valuations have surged, showcasing robust economic health and increased global competitiveness.
The influx of international stars due to the designated player rule has elevated MLS's standing in the global football arena.
Experts emphasize market forces, investor interest, and brand building in driving MLS valuations, while discussions of an MLS-Liga MX merger highlight evolving football dynamics in the Americas.
Deep dives
MLS Franchise Valuations on the Rise
MLS franchise valuations have surged over the years, with Atlanta United exemplifying this trend. Despite a challenging 2021 due to the global pandemic, the team's worth increased from $500 million in 2019 to $845 million in 2021 post-pandemic. This significant jump in valuation, along with notable transactions like the sale of Houston Dynamo FC and Orlando City Soccer Club, underscores the league's robust economic health.
Impact of Designated Player Rule in MLS
The designated player rule, popularly known as the David Beckham rule, has transformed Major League Soccer into an attractive destination for international football stars. Players like Kaka, Wayne Rooney, and Zlatan Ibrahimovic have graced the MLS due to this rule. This influx of global talent has elevated the league's competitiveness and international standing, making North American football a more serious contender in the global arena.
MLS Valuation Insights from Experts
Experts like Roger Mitchell and Jordan Gardiner offer valuable insights on MLS valuations. They highlight the role of market forces and investor interest in driving up valuations, emphasizing the influx of capital into sports properties. While acknowledging the flow of money as a key factor, they also discuss the importance of brand building, governance, and sustainable business models in determining franchise values.
MLS and Liga MX Merger Prospects
Discussions around a potential merger between MLS and Liga MX have gained traction, reflecting the changing landscape of football in the Americas. Despite differences in league structures and governance, the leagues have started exploring joint competitions that hint at closer collaboration. However, challenges related to promotion-relegation systems, TV rights, and ownership dynamics pose hurdles to a formal merger.
Challenges and Opportunities in MLS Investments
Investors like Jordan Gardner share reservations about MLS valuations and investment appeal compared to European football. Issues such as revenue disparities, lack of promotion-relegation, and limited growth potential impact investment decisions. Gardner highlights the need for entrepreneurial opportunities and high-growth prospects in football investments, emphasizing the differences between European and North American football business models.
Stemming from the recent Sportico valuations of Major League Soccer teams, Rhys looks at the controversial gap in the numbers since the Forbes valuations in 2019, and considers the state of football in the Americas with a particular focus on the frequently floated idea of the MLS and the Mexican League, the Liga MX, joining forces to challenge Europe for the centrepiece of football. Rhys is joined by by guests Roger Mitchell and Jordan Gardner to highlight the interesting yet differing views on the future of football in the Americas, and Europe for that matter.