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Saturday, December 21, 2019

The World’s Most Valuable Sports Empires: Worth $8.4 Billion, Kroenke Sports Lands At No. 1

Jumping ahead to items of direct interest for baseball fans:

Fenway Sports Group was an early adopter of the bigger-is-better mentality with its vertically integrated sports model. FSG’s assets, worth $6.6 billion, come from baseball, English soccer, Nascar, cable TV and sports marketing. So when Best Buy decided to stop sponsoring the Boston Red Sox, FSG kept the marketing dollars in the family by directing the retailer to its Nascar team, Roush Fenway Racing. Sports marketing client LeBron James sold his buddy Jay-Z on Fenway Park when the rapper was in search of a Boston concert venue. One hand feeds the other.

 

 

QLE Posted: December 21, 2019 at 12:50 AM | 13 comment(s) Login to Bookmark
  Tags: business

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   1. puck Posted: December 21, 2019 at 12:48 PM (#5910295)
Interesting stuff. A lot of it's known if you follow other sports but who can follow them all.

I'm sure Kroenke being #1 will make Arsenal fans real happy.

The guy who bought the Carolina Panthers was also recently awarded a MLS franchise. The franchise fee was $325 million!

I've been watching my local MLS team for a while, but that blows even my mind. It seems like a ponzi scheme as these teams for the most part are still not generating huge revenue (there's almost no tv audience to speak of compared to other sports), and the costs can only go sky high as the league glacially and asymtotically crawls its way towards the level of a "real league" and needs to start paying for better players. But I also assume this guy is not stupid, the people who invested in LAFC and NYFC aren't either, etc.
   2. It's regretful that PASTE was able to get out Posted: December 21, 2019 at 04:57 PM (#5910331)
Couldn't you probably buy a midtable English Premier League team for $325 million?* Isn't that a better bet than an MLS team? MLS has apparently reached the point where it's a stable league in no near-term jeopardy of folding, but it's a long, long way from capturing a significant TV audience (and in the 21st century, TV revenue is everything).

* Apparently not, the Kroenkes paid a lot more than that for one!
   3. Ben Broussard Ramjet Posted: December 21, 2019 at 05:03 PM (#5910332)
A lot more risk with a midtable Premier League team, though, due to relegation (and the fact that a lot of the big bucks are from the Champions League, where those teams seldom venture). Maybe you luck out and get Leicester, but if you snap up a Crystal Palace, a year later they may be at the equivalent of AAA, at least temporarily. I presume MLS doesn't carry that risk - you can be as bad as you like for a few years without any more problems than a stained reputation and fewer fans through the turnstiles, but seldom an existential threat.
   4. Pat Rapper's Delight (as quoted on MLB Network) Posted: December 21, 2019 at 05:12 PM (#5910335)
[MLS] seems like a ponzi scheme as these teams for the most part are still not generating huge revenue (there's almost no tv audience to speak of compared to other sports)

That's what the Field of Schemes website has been called MLS for a while. Their own commissioner admits the league is still losing money on operations (meaning "actual soccer games"). The only "profits" are generated from divvying up the ever-increasing expansion fees since there are more hands in the pie now... or does anyone really believe there is demand in the market for 30+ MLS teams? It's a confluence of having more billionaires desiring vanity sports team ownership than there are real major league teams available coupled with unsophisticated smaller and smaller town rubes thinking if they only build a $300M+ stadium for a handful of home soccer games that it will confer "major league" status on their cities and therefore pay off in economic development through "exposure."

He's also starting to refer to MLS as the WeWork of sports since their business plan apparently is also

a) burn through huge piles of cash for a long time with no return
b) ?????
c) generate insane amounts of profit in perpetuity
   5. It's regretful that PASTE was able to get out Posted: December 21, 2019 at 05:19 PM (#5910338)
A lot more risk with a midtable Premier League team, though, due to relegation (and the fact that a lot of the big bucks are from the Champions League, where those teams seldom venture). Maybe you luck out and get Leicester, but if you snap up a Crystal Palace, a year later they may be at the equivalent of AAA, at least temporarily. I presume MLS doesn't carry that risk - you can be as bad as you like for a few years without any more problems than a stained reputation and fewer fans through the turnstiles, but seldom an existential threat.


Right, agreed, but it still looks like a better long-term bet than MLS, which is already basically on the English Championship's level, or worse. There's no TV money and probably will be no TV money in the foreseeable future. Buying an expansion MLS team seems on its face more on the level of spending $325 million on Charlton or something.

As has been said above, the real prospects for ROI on paying for an MLS team seem to rest mainly on hosing local businesses in your city and the Ponzi scheme continuing.

I'm not saying MLS is hopeless or anything, just that $325 million is an insane price to pay for an expansion team in that league. For another comparison, that much money can probably buy you a well established NHL team; the NHL is far below the profitability level of MLB or the NBA, but twice that far above that of MLS.
   6. puck Posted: December 21, 2019 at 05:36 PM (#5910341)
* Apparently not, the Kroenkes paid a lot more than that for one!


Ha! Arsenal wasn't mid-table when they bought it.

I have no idea how much a mid-table team would be, probably a lot more. I wonder how much it would cost to buy a team in the Championship then buy yourself into promotion.
   7. puck Posted: December 21, 2019 at 05:39 PM (#5910342)
For another comparison, that much money can probably buy you a well established NHL team; the NHL is far below the profitability level of MLB or the NBA, but twice that far above that of MLS.


Can it? Vegas's expansion fee was $500 million, Seattle's is $650 million.

Not that $325 million doesn't still sound crazy for a MLS franchise.
   8. It's regretful that PASTE was able to get out Posted: December 21, 2019 at 05:39 PM (#5910343)
I have no idea how much a mid-table team would be, probably a lot more. I wonder how much it would cost to buy a team in the Championship then buy yourself into promotion.


That can be a Real Bad Idea, ask anyone in Portsmouth. Or Bolton.
   9. Crispix Attacksel Rios Posted: December 21, 2019 at 10:05 PM (#5910372)


I'm not saying MLS is hopeless or anything, just that $325 million is an insane price to pay for an expansion team in that league. For another comparison, that much money can probably buy you a well established NHL team; the NHL is far below the profitability level of MLB or the NBA, but twice that far above that of MLS.


An NHL payroll is probably 10 times that of an MLS team though.

and the costs can only go sky high as the league glacially and asymtotically crawls its way towards the level of a "real league" and needs to start paying for better players.


A "real league" by US cartel-franchise-league standards but it's already beyond the size of normal soccer leagues. Usually the top league has maximum 20 teams and then there's relegation to the lower levels.

I hope the eventual goal is to have a 20-team top division and a 20-team B division. I'm sure nobody paying a franchise fee would accept the possibility of being relegated out of MLS for losing all their games, but you could have two levels of MLS.
   10. It's regretful that PASTE was able to get out Posted: December 21, 2019 at 10:17 PM (#5910375)
An NHL payroll is probably 10 times that of an MLS team though.


True, a very good point. But it also underscores the fact MLS is to soccer roughly what the Sally League is to baseball.
   11. Ben Broussard Ramjet Posted: December 22, 2019 at 11:54 AM (#5910428)
Right, agreed, but it still looks like a better long-term bet than MLS, which is already basically on the English Championship's level, or worse. There's no TV money and probably will be no TV money in the foreseeable future. Buying an expansion MLS team seems on its face more on the level of spending $325 million on Charlton or something.


This is quite possibly true. I suppose my stance would be that English football, value-wise, is surely near its peak. Football's the top dog in England, it has been for decades, and the market feels saturated. Could MLS reach a new level of popularity in the next 10 years or so? I'm not confident it will, but at least it feels like there's room to argue that it might.
   12. I am going to be Frank Posted: December 22, 2019 at 12:20 PM (#5910432)
The Jaguars owner also owns Fulham, who are currently in the Championship. They were in the Premiership for a fairly long time, got demoted and came back up, then just went back down at the end of last season. They've spent a lot of money over the past couple of years trying to get back to the Premiership and to try and stay there and it didn't really work. Leeds is well-supported and had decent success in the top-tier in England and Europe that financially imploded, got demoted (twice) and still hasn't gotten back up in over 15 years.

MLS will soon have 30 teams and there are a bunch of cities that seem to get in on the action as well. That is entirely too unwieldy. Even if the national TV deals grow a lot, the pie will be split a lot.
   13. CONservative governMENt Posted: December 22, 2019 at 12:45 PM (#5910438)
Leeds is well-supported and had decent success in the top-tier in England and Europe that financially imploded, got demoted (twice) and still hasn't gotten back up in over 15 years.


This is the season! Glory, glory Leeds United!

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