An inside look at why billionaires buy into money-losing Major League Soccer (hint: It’s not really losing money)

With the addition of Sacramento Republic FC, Major League Soccer will gain a new squad of players, a new stadium, and a new home city to its ranks. Unlike teams, which are mostly limited in their chief revenue streams to game day/merchandise/ticket/corporate sponsorship sales, SUM is free to generate additional significant money through whatever avenues happen to come up as soccer continues its upward growth trajectory in the U.S. “Its potential isn’t limited the same way soccer is limited,” said Andrew Zimbalist, a sports economist at Smith College in Massachusetts. If the expansion cities’ district plans are successful, it will mean more revenue for team owners and more justification for the investment even if the league itself isn’t in the black, along with many of its teams — While MLS teams and the league don’t disclose financial information, data from Forbes’ annual MLS team valuations shows that 15 of 23 clubs studied after the 2017 season had negative operating income, i.e. Still, in terms of overall worth, MLS teams remain in the long shadow of the more mature American pro leagues: The average NFL team value is $2.86 billion; it’s $1.78 billion in MLB; $1.87 billion in the NBA and $630 million in the NHL. “Soccer more so than a lot of these other leagues taps into that community sentiment.” While the league’s major revenue deals remain dwarfed by what the other major leagues collect, MLS still has some tidy sums coming in: Its kit deal with Adidas pays it $90 million annually through 2024, and its broadcast rights deals with ESPN, Fox, and Univision are worth a combined $720 million through 2022.