LAFC value hits 1 billion dollars, but who’s buying?

Los Angeles Football Club has become the first Major League Soccer side to hit $1 billion in valuation. This is according to a report by Forbes. LAFC has only been a part of the United States top flight for nine years. Head managing owner Bennett Rosenthal and his partners initially paid a $110 million expansion fee to join the league.

LAFC value more than doubled since 2019

The massive surge in valuation in such a short amount of time is amplified by the fact that Forbes has doubled LAFC’s worth in just four years. Forbes previously valued the club at about $475 million in 2019. This was the last time that the company issued valuations for American soccer teams.

While it’s an incredible return on investment, Rosenthal previously claimed that he didn’t start LAFC to make tons of money. “We did not do this because we thought it was the best place to put our capital,” Rosenthal said about starting the franchise. “We thought it could be fun and we’re making a great macro bet on the growth of the sport.”

LAFC’s valuation is certainly a sign that MLS is growing in multiple ways. The league began in 1996 with just 10 teams. Now, heading into the 2023 season, there will be 29 total clubs competing for the title. Along with the influx of teams, valuations are also rising across the board.

MLS clubs’ valuation rose on average 85% over last four years

According to Forbes, the average team valuation has increased 85% since 2019. The outlet claims that the average MLS side is worth about $579 million now. Another report claimed that many American clubs are actually worth more than some Premier League teams. In fact, England’s seventh-most valuable club, Everton, is worth about the same as New York Red Bulls. RBNY ranks 18th in MLS team valuations.

It will also cost much more to form an expansion team now as well. The next expansion club, possibly San Diego or Las Vegas, is expected to cost around $500 million. Charlotte FC previously set a record when they joined MLS for $325 million less than four years ago. Compare this to Toronto FC forking up just $10 million to join the league in 2007 and New York City Football Club paying $100 million for a franchise in 2015.

Club sales have already seen significant rise

As reported valuations are rising, we can expect a massive increase in potential sales as well. Columbus Crew previously sold for just $150 million in late 2018. Orlando City, on the other hand, changed hands for between $400 million and $450 million in the summer of 2021.

A significant boost in valuations can be partially attributed to the recent Apple media rights deal. Under the agreement, MLS is essentially guaranteed at least $2.5 billion over a 10-year period. This figure could actually rise depending on the total amount of subscriptions.

Along with LAFC, LA Galaxy ($925 million), Atlanta United ($850 million), NYFC ($800 million), and DC United ($700 million) round out Forbes‘ top five MLS clubs in value.

PHOTO: IMAGO / ZUMA Wire