TFC the fourth most valuable on Forbes list
Magazine values franchise at $245 million, up $70M from a season ago
About a decade after Maple Leafs Sports and Entertainment bought into Major League Soccer for a $10million expansion fee, Forbes magazine has valued Toronto FC at an estimated $245 million (all figures in U.S. dollars).
The Reds sit fourth in the league in Forbes’ fourth valuation of franchises, behind the Seattle Sounders ($285 million), Los Angeles Galaxy ($265 million) and New York City FC ($245 million).
The estimates are based on multiples of revenue, as well as projections of future growth for the league.
TFC president Bill Manning said he thinks the club is more valuable than given credit for, but is pleased that the magazine held the club in such high esteem. The Reds were valued at $175 million last year, fifth in the league.
“This franchise is absolutely head- ing in the right direction, both on the field and off the field,” Manning said. “It was nice to see that Forbes recognized we’re one of the franchises that’s brand has really grown.”
Forbes pointed toward the BMO Field renovation, TFC’s payroll investments, its attendance (fourth in he league) and on-field success as reasons Toronto FC jumped a spot. The average MLS team is now worth $185 million, up 18 per cent from 2015 and 80 per cent from 2013, according to the report. The league’s other Canadian clubs, Montreal and Vancouver, were 16th and 17th on the list, at $135 million and $128 million respectively. When MLSE purchased the Reds’ franchise in 2006, then president and CEO Richard Peddie imagined it would be worth about $30 million dollars a decade on. He told the Star Tuesday that talking MLSE’s board of directors into the deal wasn’t all that difficult, thanks to the city’s de- mographics, positive projections about the stadium’s location and a league that had started to show some growth after struggling in its early years.
“Frankly, the money was so little ? $10 million plus the money for the stadium ? we weren’t risking a lot,” Peddie said.
About 10 years later, the league’s expansion fees could reach $200 million the next time it grows, as reported by MLSsoccer.com in early August.
Peddie believes if Toronto was making a deal for a franchise today, MLSE’s board of directors would scrutinize the recommendation to acquire a franchise a lot more closely. But that’s not to say it wouldn’t happen, he said; buying an MLS franchise is still cheaper than sinking money into an NBA, MLB or NFL organization.
“I’d make a case that it’s one of the most inexpensive deals you can make.”
Toronto FC is still losing $9 million a year, according to Forbes’ operating income estimates for 2015.
President Manning wouldn’t speak to that number specifically, but did acknowledge the club made some large investments in players — strikers Sebastian Giovinco and Jozy Altidore and midfielder Michael Bradley are three of the highest paid athletes in the league — and BMO Field recently.
“I believe that all those investments are actually going to pay off as our business and revenues are growing,” he said. “That’s how the organization is looking at it.”