This week, Sportico – a website that reports on the business of sport – released their annual list of the 50 most valuable soccer teams in the world. At the top of that list are the teams you'd probably expect. Real Madrid sits at number one with a valuation of $6.5 billion off $1.13 billion in revenue; Manchester United is No. 2 while valued at roughly $6.1 billion on $834 million in revenue; and the Top 15 are the European giants you'd probably expect, all making hundreds of millions in annual revenue.
But the list makes a very clear turn once you get past that point. MLS teams occupy 19 of the next 35 spots in the Top 50, with LAFC topping the group at a projected valuation of $1.28 billion and four more MLS teams right behind all carrying valuations of at least $1 billion.
The Sounders clock in at No. 25, valued at $825 million on about $83 million of revenue. Adrian Hanauer, Joe Roth and Drew Carey reportedly paid a $30 million expansion fee to join MLS ahead of the 2009 season.
That's obviously a rather amazing return on investment, even considering that Hanauer bought some of his shares in 2015 when he became the majority owner and some more in 2019 when Joe Roth sold his.
The bigger takeaway from this list is probably how much less connected MLS valuations are from revenue. While most teams’ valuations are 5x or 6x revenue, most MLS teams clock in around 10x. The simple explanation for this would seem to be that unlike their European counterparts, costs and risk in general is far more controlled in MLS.
The most obvious difference is that MLS does not have relegation. But beyond that, they also have a salary cap and are able to utilize economies of scale as a product of operating as a "single entity."
I do think there's reason to think some of these dynamics could change in the next five to 10 years. As it is, the English Premier League, Liga MX and Champions League broadcasts far outdraw MLS in the United States. That gap only seems to be growing each year MLS is stashed behind the AppleTV paywall.
Now, there's another challenge on the horizon. I don't think USL's decision to adopt promotion and relegation by 2028 is going to challenge the supremacy of MLS in the short term, but it does create a new variable that will likely change the dynamics in certain markets.
This is not a time for MLS to rest on its laurels or to view the 2026 World Cup as an event that will invariably lead to a growth in popularity. When the 1994 World Cup concluded, there were about 10 professional soccer teams in the United States. By the time the 2026 World Cup concludes, there will likely be more than 100 men's teams and another 30 or so women's teams.
Possibly even more challenging is that soccer was almost impossible to watch on TV in 1994, whereas the average soccer fan can now access almost any game from any league around the world with relative ease.
Valuations like these are flattering, but it would be a mistake to assume they will continue this trajectory without MLS being proactive about capitalizing on the energy that will invariably surround 2026.
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Catching up on Sounder at Heart
Here's what you missed on the site this week.
Sounders
Next match: Today at Houston Dynamo, 5:30 PM.
- PRO admits mistake on handball decision
- Craig Waibel makes clear he's in no rush to move Obed Vargas
- Osaze De Rosario signs first-team contract
- Young players showed quality in loss to Timbers
- Ryan Kent declared fit enough to start
- Osaze De Rosario making his own way
- Realio's Ratings: Enjoy the finer things
Reign
Next match: Sunday vs. Houston Dash, 5 PM.
- Opposition Scouting report: Houston Dash
- Valkyratings: Blanking the league's best
- Three stats: Reign vs. KC Current
- The Cooler Guild: The first Bieyengoalo
Defiance
Next match: Wednesday, at Vancouver Whitecaps 2, 6 PM.
- Defiance are fun to watch, deserve marketing to match
- Defiance fall just short in Open Cup loss to Timbers
Spokane
Next match: Today, at South Georgia Tormenta, 4:30 PM.
Looking back at the news
Everything else you need to know
Saying they feel targeted, Nashville's Latino supporters group is protesting ICE activity by halting game-day activities (SixOneFive Soccer).
Sebastian Berhalter shares how he rose from a player seemingly no one wanted into arguably the best central midfielder in Concacaf (MLSsoccer.com).
Sam Meza has quietly become a massive force in the Reign midfield (Observation Station 2004).
USL Championship teams apparently cost about $25 million, with League One teams costing about $10 million. (JohnWallStreet)
NWSL players are feeling the benefits from recently enacted mental health policies (The Guardian).
Former Reign midfielder Tziarra King joins West Seattle Rhodies as an assistant coach (West Seattle Rhodies).
A wild week of NWSL action was more evidence that this might be the most competitive women's league in the world (Pro Soccer Wire).
MLS executive Seth Bacon insists the league is still quite happy with the Apple deal. (Awful Announcing)
FIFA is seeking to ease concerns over visa applications connected to the World Cup. (Goal)
Although they didn't get into Matt Doyle's top tier, the Sounders are considered "real contenders". (MLSSoccer.com)
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