Market Insight: Major League Soccer: five facts that prove USA’s top tier’s league is closing the gap on the European elite

Market Insight: Major League Soccer: five facts that prove USA’s top tier’s league is closing the gap on the European elite
Major League Soccer (MLS) has seen great growth in recent years at multiple levels, becoming a world-renowned soccer league and one of the USA’s most globally renowned sporting properties alongside NBA, NFL and MLB. In this market insight piece, the Soccerex team highlights five facts which show the development of the league and its potential to continue growing.

The US soccer industry in its modern guise - discounting the boom and bust years of the original 1970’s NASL - has developed significantly since the nation hosted the FIFA World Cup in 1994. Twenty four years on and the US can look forward to hosting another World Cup in 2026, alongside Mexico and Canada following the success of the United bid.  MLS began in the aftermath of the 1994 tournament and the League today is almost unrecognizable thanks to a grassroots system that has seen the sporting level improve steadily, the continuous hard work of the league and its franchise owners to promote domestic soccer and innovative commercial strategies including initiatives such as the MLS All-Star game.

At Soccerex, we have selected five facts that prove the growth of the MLS:

  1. Rise in franchise value & demand

The MLS was founded in 1993 with 10 teams and started play in 1996. The initial ten teams were Colorado Rapids, Columbus Crew, Dallas Burn, D.C. United, Kansas City Wiz, Los Angeles Galaxy, New England Revolution, NY/NJ MetroStars, San Jose Clash and Tampa Bay Mutiny.

In 1999, Don Garber joined MLS as Commissioner, a position he still holds today. During his tenure, MLS has expanded from 10 to 23 teams with three teams added in the first decade and nine in the second. These clubs and the year they joined the league are: Chicago Fire (1998), Los Angeles Galaxy and Salt Lake City (2005), Houston Dynamo (2006), Toronto FC (2007), San Jose Earthquakes (2008), Seattle Sounders (2009), Philadelphia Union (2010), Portland Timbers and Vancouver Whitecaps (2011), Montreal Impact (2012), New York City and Orlando City (2015), Atlanta United and Minnesota United (2017) and Los Angeles FC (2018).

In addition, the league will be joined by clubs in Cincinnati (2019), Miami (2020) and Nashville (2020) with Detroit, Sacramento and San Diego as expansion candidates for 2022, as part of the league plans to expand to 28 teams. The fee for new MLS entrants has jumped from $10 million to $150 million in a decade. It is worth noting that, as part of David Beckham’s MLS contract to play for the Los Angeles Galaxy in 2007, Beckham was promised the opportunity to buy a team in Miami in return for a $25 million expansion fee if he played at least five years in the league – which he did – and now looks to be a bargain. With this clause, Beckham could be saving (or making!) $125 million for the new Miami MLS franchise.  

  1. America’s rising interest in soccer

According to Nielsen, MLS has experienced a 27% rise in interest since 2012 and now nearly half the Americans (47%) are interested in the beautiful game. 

Furthermore, Hispanics accounted for 68% of soccer viewership in 2017., Considering that Hispanics are a growing segment of the population means that growth is almost guaranteed thanks to demographics.

Moreover, considering that the World Cup will soon be landing in the US and that the MLS will be arriving in new metropolis such as Miami, interest can only be expected to grow.

And if this was not enough, the MLS is also broadcasted overseas by GOLTV in Latin America, Eurosport across multiple European countries and Sky Sports in the UK and Ireland which is part of an internalization strategy for the brand. 

  1. Stadium attendance reaching new heights

MLS’s total attendance has gone from 2.8 million in 1996 to 8.2 million in 2017. In 1996, the average attendance was 17,406 with LA Galaxy having the highest average attendance with 28,916 spectators.  Today, the average attendance is 22,113 with Atlanta United having the highest average attendance with 48,200 spectators, followed closely by Seattle Sounders with 43,666. Toronto, Orlando, New York, LA Galaxy, Vancouver, Portland and Montreal all had average attendance above the 20,000 mark. 

Furthermore, Atlanta United set a new MLS single-match attendance record only few weeks ago gathering 72,243 soccer fans under one roof at the state-of the-art Mercedes-Benz Stadium.

  1. Engaging young fans through gaming and new media

The popularity of the MLS is on the rise amongst younger fans and a reflection of this is that videos on the league’s official Youtube channel are being viewed by millions week after week. While the most watched video is David Beckham’s goal off a corner kick with 7.4 million views – a video that has been available for 7 years in the platform -, Zlatan’s debut goal is the second with almost 6 million views in just over 4 months. Out of the 20 most watched videos, five have been produced in 2018, with the latest two additions being yet another hat trick from Zlatan and the video “Our soccer”.

It is worth pointing out that fan-centered media Copa90 announced a new strategic partnership with Soccer United Marketing, the for-profit marketing arm of the MLS. We can only expect that Copa90 will benefit from the growth of the MLS and the league will benefit from original and engaging content published on the media in this win/ win deal.

Another line of business and promotion for MLS is the launch of the eMLS Cup, a competition with one FIFA eSports player representing each club in the league. The first edition’s champion, Kid M3Mito (Guillermo Trevino), representing Houston Dynamo, qualified for the FIFA eWorld Cup that took place last weekend at the O2 Arena in London. The eMLS Cup qualifier was held at PAX East, an exhibition for gamers in Boston, bringing the competition closer to eSports fans. 

Moreover, MLS keep exploiting eSports around multiple events, one of them being the MLS All-Star game last week producing video content with MLS and Juventus soccer stars playing FIFA on PS4.

Furthermore, MLS are breaking new grounds in content production and broadcasting. Yet another milestone was the first ever MLS player interviewed on the field while playing during last week’s All-Star game.  

The MLS are not worried about exploring unchartered waters and have partnered with R/GA Ventures to grow the MLS fanbase, a company that has helped organizations such as Snapchat and Verizon increase their business. The league embraces change and new media which can give them an advantage against more established traditional leagues to attract new young fans both home and abroad.  

  1. World-class soccer players joining the league while clubs’ value increases

The designated player rule has allowed numerous elite players to join the league over the past two decades with David Beckham being the most high profile case. The number of international players joining the MLS from other leagues has increased, particularly those coming from Europe. Since 2010, players of the likes of Thierry Henry, Frank Lampard, Ashley Cole, David Villa (Spain’s top scorer), Zlatan Ibrahimovic (Sweden’s top scorer) and Wayne Rooney (England’s  top scorer), have joined the league, will all of them playing more than a single season.

The way the MLS is perceived on the other side of the Atlantic has changed and talented European and Latin American players such as Giovinco and Dos Santos are joining the league at an earlier stage in their career, with many moving to the US before playing at national level in their own country of origin.

According to Transfermarkt, the market value of MLS squads is £436 million, a list led by Atlanta United nearing a £39 million valuation with Carlos Vela being the MVP with £9 million. With 23 teams, the average value of a squad is £18.95 million.

A decade ago, in 2008, the total market value of the league was £94 million. With 14 teams in the league back then, the average value of a squad was £6.71 million. Therefore, the average value of an MLS squad has almost tripled in ten years.

While MLS is far from the market value of big European leagues such as the Premier League, LaLiga, Bundesliga and Serie A, the expansion plans of the league, the potential to capitalise the growing interest of American consumers, the increasing appeal to local fans and international players and audiences combined with commercial strategies that embrace new media and an entrepreneurial spirit, make the MLS a great league in the land of freedom and opportunity.

Soccerex USA

Our next event, Soccerex USA, will take place in Miami on the 15th and 16th of November 2018. For more information about this event and a conference programme built around soccer in the US and the Americas, visit www.soccerex.com/usa now.

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