MLS commissioner Don Garber says the next round of expansion could be the 'final' one
Major League Soccer is on the come up. Expansion fees are at an all-time high, and it's because the league can afford to be choosy. After two decades of MLS owners losing hundreds of millions of dollars, the league has stabilized and valuations have skyrocketed. There are a number of prospective buyers hoping to get a piece of the league's next expansion, which will take the league to 28 teams. At that point, the league may stop expansion altogether.
MLS commissioner Don Garber told Forbes that the move to 28 teams "could be the final round of expansion for Major League Soccer.”
The league is currently at 20 teams, with two more set to join next year and then another in 2018. A Miami club has been granted an expansion franchise as well. MLS has committed to going to 28 teams too, although they haven't awarded any of those yet. Sacramento and St. Louis are among the front-runners right now.
According to the Forbes report, the average MLS team is now worth $185 million, up 18% from last year. That's an 80% improvement from 2013, and an incredible 400% gain from MLS's first valuations in 2008, when the average worth of each team was a paltry $37 million.
The price of entry into the league was $40 million just four years ago, and the fee for each round following has broken the previous record. Garber stands by the progression though: "There were a lot of questions and concerns among potential investors as to the price. But today I think [team owners] are feeling pretty good about the investment they made in the league, regardless of the price they paid.”
After decades of struggle, it's the perfect time for ownership groups to take advantage of an opportunity in the market to launch their own MLS franchise. Atlanta United and Minnesota United don't even kick off till next season, but Atlanta has already sold over 22,000 season tickets. Minnesota United was reportedly selling a season ticket package every 90 seconds after the announcement of their move to MLS. The time is ripe. But, according to Garber, that may not be the case for long:
"That’s a far cry from what we used to see in the early days of MLS when it was a real struggle to find people who really believed in the opportunity,” says Garber, ”Now there are many more cities and many more investors than we have available opportunities. And that allows us to be very careful and strategic in how we manage what could be the final round of expansion for Major League Soccer.”
It remains to be seen whether Garber's comments are designed to get prospective owners to scramble and put together a legitimate MLS franchise package, or if plans are actually to halt league expansion after the addition of the Los Angeles and Miami teams. It's worth noting that, every time MLS expands, its existing owners are giving up equity in the league. So capping expansion makes sense from an owner standpoint, even if it seems counter-productive to the growth of American soccer.
We'll just have to see what the future holds.
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