Soccer newsletter: How much is an MLS club worth?
Hello, and welcome to another edition of the L.A. Times soccer newsletter. I’m Kevin Baxter, The Times’ soccer writer, and we begin today with a theoretical question: How much is an MLS franchise worth?
It’s a relevant question given last week’s news that Vincent Tan, an original LAFC owner, sold his 20% share of the franchise with the sale price pinning the team’s value at $700 million. That’s by far the highest valuation in MLS history.
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And LAFC may not even the league’s most valuable team. Galaxy president Chris Klein says clubs are worth whatever someone is willing to pay for one. Based on recent transactions, that means the annual Forbes list of has been woefully undervaluing the league.
Consider the most recent compilation of franchise worth. Atlanta United topped the list at $500 million followed by the Galaxy at $480 million and LAFC at $475 million. But when former California gubernatorial candidate Meg Whitman purchased a 20% interest in FC Cincinnati last winter, she paid $100 million – making the team’s value a half a billion dollars.
That’s almost $100 million a victory for the second-year team, which has won six MLS games. Forbes valued the team at $285 million.
So if FC Cincinnati, with its six wins, is worth $500 million, is the $700 million valuation for LAFC, which last year posted the best regular-season record in league history, fair? Is the Galaxy, the most successful franchise over the league’s first 24 seasons, worth even more?
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But we may never know since AEG, the team’s owner, isn’t likely to sell any time soon.
How much to pay for a team – and thus, in Klein’s view, how to set its value – is determined by a number of factors, some objective and some not.
What are the team’s assets worth? Transfermarkt puts the value of LAFC’s roster at $75 million, nearly $30 million more than the Galaxy. Then there’s the stadium and training grounds. Banc of California Stadium, LAFC’s home in Exposition Park, cost approximately $350 million to build three years ago and is surely worth more now.
The Galaxy play at Dignity Health Sports Park in Carson. But the 27,000-seat stadium is just part of a sprawling complex that includes multiple practice fields, a velodrome, a tennis stadium, multiple practice courts and a track and field stadium. The facility has hosted the NFL and XFL, world-championship boxing matches, the X Games and several other events. Its value far exceeds the nearly $250 million it cost to build 16 years ago and would certainly drive up the value of the franchise if any or all of that was included in the sale.
Then there’s the prestige associated with the teams. Let’s call that the franchise curb appeal and it has more to do with the brand than the team’s current record. It’s why the Dallas Cowboys is ranked by Forbes as the world’s most valuable sports franchise despite the fact the team has won just two playoff games in the last decade and hasn’t won a Super Bowl this century.
So what’s the mark-up for LAFC, which has the league’s reigning MVP in Carlos Vela, some of the most passionate fans in MLS and a string of 35 consecutive regular-season sellouts? What’s the mark-up for the Galaxy, the league’s most recognized club globally and the team that brought David Beckham, Robbie Keane, Steven Gerrard, Gio dos Santos, Zlatan Ibrahimovic and Javier “Chicharito” Hernandez to MLS?
Well, whatever anybody will pay for them. And whatever that price is, it will only go up.
A spreading concern
The Coronavirus is already impacting sports and that will only grow over the coming months as the IOC weighs whether or not to cancel this summer’s Olympic Games in Japan.
Fear of having huge crowds gathering to watch sporting events, and possibility spreading the virus, has caused Japan’s Nippon Professional Baseball League to schedule its final 72 preseason games in empty stadiums. The country’s soccer league has canceled 96 games through March 15 while leagues in South Korea and China have postponed play indefinitely.
In the Chinese Super League, where high salaries had drawn big-name international players such as Oscar, Hulk, Marouane Fellaini, Javier Mascherano and Carlos Tevez in recent years, the health scare combined with a new salary cap have conspired to decimate the transfer market and threatens to cripple the league.
The crisis recently moved beyond Asia with nine Serie A matches in Italy having been suspended over the last two weekends and the Italian government announcing that all future sporting events in regions affected by the virus be postponed until March 8, a ban that will impact Serie A matches featuring Lazio, Juventus, AC Milan, Inter Milan and Napoli. The league has scheduled an emergency meeting for Wednesday.
Giuseppe Marotta, Inter Milan’s CEO, told Gazzetta dello Sport that there is a risk the Serie A season may not finish.
“If more matches are called off then, yes, we run that risk,” he said.
Officials in the U.S. have not been forced to confront those tough decisions yet but MLS commissioner Don Garber, in Los Angeles for Sunday’s LAFC-Inter Miami match, said his league is monitoring the situation closely.
“I think you’re going to see coordination discussions,” said Garber, who said MLS is in contact with other leagues around the world. “All of the leagues have their own programs.”
MLS, for example, has formed a task force under the direction of Margot Putukian, its chief medical officer, and is working closely with the Centers for Disease Control in Atlanta and Canada’s Public Health Agency in Ottawa.
“We’re no different than any other league, any other business that’s catering to the public,” Garber said. “We, like every other citizen in the world, is paying close attention to it.
Liverpool hardly seeing red after loss
Liverpool’s near-perfect Premier League season shouldn’t be tarnished by last Saturday’s 3-0 road loss to Watford. If anything the result should be celebrated as evidence of just how tough the Premier League is, which underscores, rather than detracts, from Liverpool’s dominance.
Liverpool and Watford went into the game separated by 55 points in the table, with Liverpool just weeks away from clinching its first-ever EPL title and Watford in the relegation zone. And though Liverpool dominated in virtually every statistical category, Watford took twice as many shots and became the first team to score three times against the Reds in a league game since January 2019.
It was the first time Liverpool allowed three goals in an EPL loss since October 2017. In fact, Liverpool had allowed just three goals in its previous 11 EPL games combined. (Ominously Alisson, Liverpool’s keeper, has given up five goals in his last two games following a streak that saw the Reds post clean sheets in 10 of 11 games.)
Where else but the EPL can arguably the best team in a league’s history lose soundly to another that may be on its way down to a lower division? The phase “On any given Sunday” was created to reflect on the parity of the NFL but it more truly fits the EPL.
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Saturday’s loss was Liverpool’s first in 422 days and 44 matches, the second-longest streak in English top-flight history. It also ended the Reds’ winning streak at 18 matches, leaving it tied for the EPL record with Manchester City, and erased any chance of matching Arsenal’s Invincibles of 2003-04, the only English team in the last 131 years to finish a top-flight season unbeaten.
However Liverpool defender Virgil van Dijk told reporters the result hurt more than the loss records.
“Losing hurts,” he said. “The records are only for the media, we didn’t even mention it once.”
Liverpool, the reigning European champion, can still clinch the league title before the end of the month – which would be another record – and remains on pace to set EPL marks for wins and points. That left uber-positive Liverpool manager Jurgen Klopp to suggest the loss to Watford could actually help in that chase.
“We were going to lose a game at some time. We didn’t wait for it but it was clear it would happen,” he told reporters. “It happened and I see it rather positive that we got close to these records.
“Now we can play free football again and don’t have to try to get a record. We just have to try to win football games again, and that’s what we will do.”
And given the competition, if they do that they deserve to be considered among the best ever.
First weekend takeaways for Galaxy, LAFC
So what did we learn about the local teams during the opening weekend of the MLS season?
We learned the Galaxy have an MVP candidate from Latin America – but he doesn’t have a catchy nickname and he never played in Europe. The smart money has always been on Cristian Pavón leading the Galaxy attack even after the acquisition of Javier “Chicharito” Hernández and he showed why Saturday, with his first-half wonder strike giving the Galaxy its first points in Houston since 2017 with a 1-1 draw.
Pavón, who joined the Galaxy from Argentina’s Boca Juniors last August, has four goals and eight assists in 12 regular-seasons. As he continues to get more familiar with the league, it’s reasonable to expect that production to pick up. MLS has never had a player finish a season with at least 20 goals and 20 assists; those numbers could be within Pavón’s reach.
The goal was among the best on the opening weekend of the league’s 25th season. It began with keeper David Bingham’s long goal kick, which covered more than 50 yards to land on the outside of Pavón’s right foot. It became an individual effort after that with the winger carrying the ball deep into the Houston end, dribbling across the top of the box and drilling a right-footed strike into the top corner near the far post.
In Saturday’s game, in addition to the goal, Pavón had two of the Galaxy’s three shots on goal, created twice as many chances as any other player and only defender Rolf Feltscher, with 57 touches, had more than Pavón’s 56. Pavón also made 35 passes; only center backs Giancarlo González and Nicolas DePuy had more.
The same optimism can’t be applied to Hernández , who struggled in his first MLS game. Although the Galaxy continued to target their striker, they rarely connected and as a result no starter touched the ball less than Hernández , whose only shot was a weak attempt that went well wide of the net in the 11th minute.
“We have a point,” Hernández, the Galaxy’s captain, said in Spanish. “If we want to be champions we have to improve a lot.”
The Galaxy will try to do just that Saturday when it plays host to winless Vancouver in its home opener at Dignity Health Sports Park.
LAFC, meanwhile, underscored just how deep its roster is by beating a determined Inter Miami team 1-0 in its regular-season opener Sunday, just three days after a gutty and emotional 3-0 victory over Leon in CONCACAF Champions League play.
“After the effort of Thursday, winning today is a real team win,” coach Bob Bradley said. “Passing wasn’t as sharp, our pressing wasn’t as committed and as intense. But winning in that way is important for us.”
The only goal – which was equally as spectacular as Pavón’s – came from Carlos Vela, Hernández’s Mexican national team teammate, just moments before halftime.
The sequence started with LAFC keeper Kenneth Vermeer, who had seven saves in his MLS debut, sending a goal kick from the edge of the six-yard box straight down the middle of the field. The ball bounced twice before Diego Rossi volleyed it forward to Vela, who chested it down, sliced between two Miami defenders toward the top of the penalty area, fought off a physical challenge from Nicolás Figal and then lofted a left-footed chip off the fingertips of backpedaling Miami keeper Luis Robles, who finished the play tangled in the back of the net.
For Vela, the reigning league scoring champion who celebrated his 31st birthday Sunday, the goal was his 49th in 60 MLS games. Add in his 28 assists over that span and he’s contributed to 77 goals, most in league history over a 60-game span.
“All you should be allowed to ask me about and all you should be allowed to write about is the goal,” Bradley told reporters afterward. “When you come to see football and the game is determined on a play like that -- which was a combination of determination, strength, and holding guys off, and still with an idea of how he could get away, the position of the goalkeeper, and to finish it off with that delicate chip-in -- that was just incredible.”
LAFC will continue testing its depth Sunday when it meets winless Philadelphia at Banc of California Stadium, beginning a two-week stretch that will see it play four times in two states, two countries and two competitions.
--Sean Franklin, 34, who won two MLS titles with the Galaxy, announced his retirement last week. Franklin, a two-time all-conference player at Cal State Northridge, played for D.C. United Vancouver since leading the Galaxy ahead of the 2013 season.
--Walker Zimmerman, traded from LAFC to Nashville last month, scored the first goal in the expansion team’s history in Saturday’s 2-1 loss to Atlanta United. Former Galaxy defender Dave Romney went 90 minutes at center back next to Zimmerman.
--Tyler Miller, traded from LAFC to Minnesota United this winter, made two saves in a season-opening 3-1 victory over Portland to pick up his 35th victory since 2018. Among MLS keepers only Atlanta’s Brad Guzan has more since 2018.
--Nathan Smith, who appeared in 12 games for the Galaxy in 2017 after playing at UCLA, has joined the Orange County Soccer Club of the USL Championship. Smith, 25, spent the last two seasons with Portland Timbers 2.
“If a small club anywhere in the country gets its act together, knows how to provide playing opportunities for young kids, has good coaching and can develop players; if there’s a team there, and then at some point they can go from the fifth league to the fourth league to the third league to the second league…. I think we need more of that. I think we need to connect more dots and make more people feel part of it.”
LAFC coach Bob Bradley, speaking to SI.com, on the idea of promotion and relegation in U.S. Soccer
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