Quote:
Originally Posted by Eau Claire
Valuations for pro sports teams are very suspect. To use TFC as an example, the team loses millions every year. They've been around 13 years now and they're still drawing 5 digit tv ratings. If MLSE tried to sell them no one would buy them, at least not in Canada. And yet they're still valued at I believe somewhere around $200 million.
|
Team values are based on more than just TV ratings. The world doesn't revolve only around TV ratings. They're a fun indicator but they only glean light on one small corner of a team's public presence.
MLS team valuations are based on market value, corporate presence, brand integrity, along with all of the other normal sport indicators. TFC aren't valued highly based on their domestic TV ratings or attendance - they're valued highly because they're getting a slice of the MLS pie, and the MLS' market value is increasing on a yearly basis. The league is signing corporate deals in the hundreds of millions, including sponsorship and apparel deals, and owners are willing to spend hundreds of millions to get a piece of that pie via expansion. Adidas
signed a deal worth $700M to be the league's jersey provider.
Kit sponsors are valued at $2M-$5M per team per year. Things like that are why TFC are valued highly. If owners are willing to spend $200M just to join MLS then that thereby increases the value of the already existing franchises/products to at least around that neighbourhood.
Bournemouth is a good example of how this works. The team only has an 11K capacity stadium and play in a small town and loses money annually, but because they play in the English Premier League they're the 26th most valuable football team in the world.
https://www.afcb.co.uk/news/club-new...football-brand