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$5M for someone rejected


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#61
Koko

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The are making tons of money, but in capital gains instead of income.   If your team was worth $25 million 5 years ago and is worth $125M today, you've made money.


Its a long term investment and they will all make money on that investment. But in terms of turning a profit at the end of the year? No. I dont think so.

I saw a report a few years ago that showed every MLS team in the red with the exception of LA. Red Bull in particular posted a loss for last season. Ill keep an eye out for the full league for 2017.

#62
juberish

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Pretty sure most MLS teams (if not all) perpetually operate in the red. So profit? Eh. More like attempting to break even.
 

 

This is a myth perpetuated by the league to give them leverage to continue their calvinball ways. 

 

https://www.starsand...a-mexico-canada

 

 

So, how do these owners make money, and why are the books red for so many of these teams? Let's start with the second question. It looks like a lot of MLS clubs aren't making a profit because the extra money is being reinvested into the team and the league as a whole, as I mentioned earlier. The league introduced a new way to sign really good players whose salaries are above the league's cap but under $1,000,000, starting caliber players who aren’t quite on the DP level. Teams have doubled down on Homegrown Players and are doing a lot to keep promising players from leaving for Europe with relatively strong salaries. There are also accounting methods that can be used to nudge the numbers to make them look worse in order to get better deals when negotiating player salaries (and trying to get public financing for stadiums... more on that another time.) If you shift real money into Allocation Money, then it can maybe be rewritten as a business expense, or perhaps buying a ton of team merchandise to sell later, etc.

 

 

 

Buying into MLS also means you've bought into SUM which is very lucrative, 

 

Believing the owners are operating a loss and that they're charitable to just even run the teams at all for us.. well that means you fell for their trick. 

 

 

SUM handles all the television rights for not just MLS but all soccer in America. That means if a soccer game happens and is broadcast on national television in the United States, SUM gets a cut. All those friendlies featuring touring European clubs that happen every summer? MLS owners get a cut of that. Whenever Mexico plays a friendly in America, SUM gets a cut of that. Whenever the United States hosts the Gold Cup, SUM gets a piece of that action. SUM also has broadcasting rights for the national teams. Every time the USMNT, USWNT, or one of the youth teams has a game on TV, these MLS owners split the pot. World Cup qualifiers? SUM collects a check. This is way greater than the money MLS puts in. Essentially, SUM and its investors benefit from the entirety of American soccer, which makes the investment into MLS appealing. Of course, soccer is a rapidly growing sport in this country, with a growing appetite at essentially all levels. Case in point, SUM was valued between $500 and $600 million in 2011.This year, the valuation for the company was revealed when the MLS investors bought a portion of the company back from the investing group Providence, sitting in at over 2 billion, a massive and dramatic increase in just 6 years.



#63
Komba

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Exactly... All owners from all of the sports do the same thing...  Rich people (and that does include the players in other sports) do whatever it takes to get a bigger piece of the pie.  That includes fudging the numbers to make it look like they're not doing so well.



#64
juberish

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further reading: https://www.sbnation...ams-200-million

 

 

New MLS owners are also buying into more than just the league itself. The league’s media and marketing arm, Soccer United Marketing, was valued at $600 million back in 2011 when the league sold a 25 percent share in the company. No one knows how profitable SUM is, but considering the lengths commissioner (and SUM CEO) Don Garber goes to hide the answer from players and media during labor negotiations, the answer is something in the neighborhood of "a lot of money." MLS isn’t just MLS -- it’s an ad agency and event promotions company too. They’ve diversified their revenue streams.

 

 

And now we know from the recent investor buy-out that it's worth 2 billion currently. 

 

Stop pretending owners are bleeding out money. They are not. 



#65
ivo

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The are making tons of money, but in capital gains instead of income.   If your team was worth $25 million 5 years ago and is worth $125M today, you've made money.

Right, cap gains/team values are the end game. That's where the big money is. The SUM component mentioned above is a huge cash cow as well. I don't doubt every owner will eventually be swimming in money from these two, which is why there's a long line of potential owners willing to fork over ever-increasing sums of money.
 
I was talking about operating net income specifically. Basically DP and staff salaries/academy expenses vs tickets/prizes/TV money/merch sales/etc, on a club by club basis. I think it would be interesting to know how profitable MLS operations are. With the recent increase in MLS TV rights, I think they're already making money on this alone.

#66
sabremike

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The veracity of the owner's claims about losing money become very suspect when you realize it is in their best interests for the public to believe them.
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#67
Koko

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further reading: https://www.sbnation...ams-200-million
 
 
 
 
And now we know from the recent investor buy-out that it's worth 2 billion currently. 
 
Stop pretending owners are bleeding out money. They are not. 


Bleeding? No I dont think theyre bleeding.

So the argument then is that every MLS team and the league as a whole is working really hard to convince everyone theyre not making money?

I can see some sense in that. And some nonsense. So the truth is probably somewhere in the middle.

#68
juberish

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So the argument then is that every MLS team and the league as a whole is working really hard to convince everyone theyre not making money?
 

 

Every MLS team, the league and SUM are all the same entity. 

 

This is a common business practice and not a stretch by any means. 



#69
Koko

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Every MLS team, the league and SUM are all the same entity. 
 
This is a common business practice and not a stretch by any means. 


No argument on that matter.

#70
sabremike

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Bleeding? No I dont think theyre bleeding.

So the argument then is that every MLS team and the league as a whole is working really hard to convince everyone theyre not making money?

I can see some sense in that. And some nonsense. So the truth is probably somewhere in the middle.

If they admit they are in the black they can't cry poverty when the players ask for more. It's in the interest of the league to keep the very favorable terms they have over the players.
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#71
Koko

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If they admit they are in the black they can't cry poverty when the players ask for more. It's in the interest of the league to keep the very favorable terms they have over the players.

I thought the argument has long been that they dont want this league to make the same mistakes the old one did back in the 70s. Which is very different from an argument of were so freaking poor we couldnt possibly raise salaries.

This has gone so far off the plot though lets go back my original point. I dont think that Red Bull is salivating over the transfer fee for Taxi that theyre just gonna ship him off for some extra spending cash at the arcade. Im actually so cynical about ownership that I do t think they give a flying duck about the fee theyd get. Theyve got a bigger plan in mind. Unloading this headache for a much larger profit than a few million.

#72
RedBullScouse

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I thought the argument has long been that they dont want this league to make the same mistakes the old one did back in the 70s. Which is very different from an argument of were so freaking poor we couldnt possibly raise salaries.

 

In order to not make the mistakes the old one did, they need to maintain the perception that they are poor.   

This has gone so far off the plot though lets go back my original point. I dont think that Red Bull is salivating over the transfer fee for Taxi that theyre just gonna ship him off for some extra spending cash at the arcade. Im actually so cynical about ownership that I do t think they give a flying duck about the fee theyd get. Theyve got a bigger plan in mind. Unloading this headache for a much larger profit than a few million.

They aren't selling.     Certainly not anytime soon.


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#73
Koko

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Everyone cries poverty whenever someone wants a raise.




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