Franchise Fees in MLS Increasing at a Rate of 18% Since Inaugural Season

Major League Soccer franchise fees have increased twenty fold from the league’s ten charter clubs in 1996 to introduction of the twentieth franchise in 2013.

As the dust has settled following Major League Soccer’s much anticipated announcement of New York City FC alongside Manchester City FC and the New York Yankees, it is time to revisit the the rise of franchise fees across Major League Soccer.

Since the league’s inception in 1993 and inaugural season in 1996, MLS has experienced the highs of a business born into the excitement surrounding the FIFA World Cup hosted by the United States and lows while attempting to achieve sustainability. On the path to its current nineteen franchises, success was naturally dependent on investors and sponsors will to assume the risk of a young league in its infancy.

Franchise fees, albeit one of the many barriers to entry for a club to join MLS, make a statement on the league’s current success as well as demand for a limited number of available franchises.  Commissioner Don Garber has not ruled out a possible expansion beyond twenty clubs, but has admitted it is time “to take a deep breath.”

Though not a true figure of a club’s current value, the franchise fees are a starting point – a point, which impacts the increasing (and decreasing) value of other clubs across the league. Below is a table of franchise fees across Major League Soccer from 1996 through 2013, including New York City FC in advance of its official introduction in 2015. Franchise fees are based on a various estimates provided by Forbes and Bloomberg.

Major League Soccer Franchise Fees 1996-2015. Analysis by Business of Soccer. Data from various sources.

Major League Soccer Franchise Fees 1996-2015. Analysis by Business of Soccer. Data from various sources.

The franchise fees in Major League Soccer across both active and contracted clubs represent a 18% rate of growth from 1996 to 2013. The twenty-one clubs that have been a part of the league in its eighteen seasons and the addition of New York City FC and its $100 million franchise fee represents unprecedented growth provided the previous franchise fee was valued at $40 million.

The following chart depicts MLS’s franchise fee growth since 1996.

Major League Soccer Franchise Fees 1996-2015. Analysis by Business of Soccer. Data from various sources.

Major League Soccer Franchise Fees 1996-2015. Analysis by Business of Soccer. Data from various sources.

 

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Reporting on the business side of the world's game.