BMO Field of Dreams! Good luck to the Argos stadium-mates Toronto FC

[Shatto]

I'm not sure anyone has actually stated they wanted to see MLS/TFC fold. It is possible to infer from some of the statements, that some are not exactly rooting for the league but few really wish the league to collapse. Most of us are cautioning that the continued success of the league can't be based on exorbitant expansion fees, as that will lead to eventual disaster.
With the hugely disappointing TV ratings for the MLS Cup and the majority of the teams losing money, relying on expansion fees to keep teams afloat, is not a sound business model. What many of us are urging, is for the league, not to over reach with rapid expansion but rather take a more prudent approach to the growth of the league.
Many want to see both the Argos and TFC being successful on the field and on the books but this can only happen if MLS is put on sound financial footing and depending on what appears to be inflated expansion fees, could well blow up in the league's face sooner or later.

[argos1873]

Why is the fee $150 million? And why are people paying it? To lose money and have low tv audience. Je ne comprends pas.

Because a slick haired huckster has convinced them that soccer is the future of sport in North America. Well that's not really how it happened, but that's the jist of it. Its the same ploy they pushed in the 70s with the NASL, but the only difference now, is that is more a reality than it was then. But I guarantee you they are convincing the new franchisees that they are getting in on the ground floor. 150 million will look like chump change in a decade they are telling them. I'm very sure there's lots of immigration numbers, and demographic numbers being shown. So hey maybe they are right. I still think they are doubling down on something that is far from a sure thing. It would be like doubling down on the CFL because many Canadians watch football. But wait, many of them ONLY watch the NFL and no matter what you try to sell them, will ONLY watch NFL. Well many soccer fans ONLY watch and will ONLY watch European soccer etc. This is why many people, including myself believe the MLS is really just a pyramid scheme. Think of it, probably all pro North American leagues are a bit of a pyramid scheme, get it before the next and then make money off of the next, but no league, except maybe the NASL has expanded as rapidly as the MLS. If the TV numbers and the profit numbers were there, I would say that's warranted, but they aren't, so what does that really tell you? They are trying their hardest to get expansion money, when they can, and to hell with the future, if they can't help it. Basically a pyramid scheme.

[DoubleBlue_Red]

Look at the Atlanta United case though - they averaged 60k this year. This is in a stadium that also houses Falcons and Georgia State bowl games. Perhaps the revolution will not be televised..

[paulwoods13]

I don't think there's any doubt that MLS is here to stay and will continue to grow in popularity. Premier League, Champions League, World Cup and Euro are all way bigger in North America than they ever were in the past, so interest in the sport is growing. MLS faces some challenges, including the belief it is well below the calibre of the European leagues, but it is here, has mostly good facilities to play in, and tons of parents are putting their kids in soccer rather than more violent and expensive sports. A major structural challenge MLS faces is being out of synch with the international soccer calendar -- this causes regular disruptive breaks in its schedule and requires it to play 10 months of the year. But the idea that the whole thing is a pyramid scheme based on suckering rich guys to pay expansion fees seems way off base to me.

[Scooter McCray]

I don't think there's any doubt that MLS is here to stay and will continue to grow in popularity. Premier League, Champions League, World Cup and Euro are all way bigger in North America than they ever were in the past, so interest in the sport is growing. MLS faces some challenges, including the belief it is well below the calibre of the European leagues, but it is here, has mostly good facilities to play in, and tons of parents are putting their kids in soccer rather than more violent and expensive sports. A major structural challenge MLS faces is being out of synch with the international soccer calendar -- this causes regular disruptive breaks in its schedule and requires it to play 10 months of the year. But the idea that the whole thing is a pyramid scheme based on suckering rich guys to pay expansion fees seems way off base to me.

I agree that soccer isn't going away but most if not all of the people putting up $150 million will never see that money again. The economics of the CFL are stronger based upon viewership yet franchises are worth no more than $5 million.

[bluto]

Some people may need to adjust their thinking. NYCFC, owned by Manchester City's City Football group (6 Futbol clubs around the world and growing) was established for a $100M expansion fee less than 5 years ago. Forbes has them at $275M now with an estimated $36M revenue... which is behind TFC's valuation and revenue.

[AngeloV]

I agree that soccer isn't going away but most if not all of the people putting up $150 million will never see that money again. The economics of the CFL are stronger based upon viewership yet franchises are worth no more than $5 million.

I think stronger franchises like Ottawa, Edmonton and Saskatchewan are worth considerably more than 5M. I think the Argos sold for more than that despite the hard times they've had. I would bet the Saskatchewan and Edmonton could sell for more than $25M if they ever decided to sell to private groups.

[bluto]

I think stronger franchises like Ottawa, Edmonton and Saskatchewan are worth considerably more than 5M. I think the Argos sold for more than that despite the hard times they've had. I would bet the Saskatchewan and Edmonton could sell for more than $25M if they ever decided to sell to private groups.

The main difference in valuations is likely that the CFL's broadcaster doesn't have sexy initials like ESPN or NBC.

[Scooter McCray]

I think stronger franchises like Ottawa, Edmonton and Saskatchewan are worth considerably more than 5M. I think the Argos sold for more than that despite the hard times they've had. I would bet the Saskatchewan and Edmonton could sell for more than $25M if they ever decided to sell to private groups.

Maybe. Saskatchewan is a top 10 north America merchandise franchise, play in the best stadium in Canada and have tv viewership MLS clubs will only ever dream about. How can they be worth 1/6 of an MLS expansion fee? Coke ca juste.

[Tau Ceti]

Credible valuations of the Roughriders are around $40-45 million. This is "real value," based on actual revenue, expense, profit, etc.

Real valuations of the middle tier of MLS would probably be in a similar range. But the $150 million figure is not based on real value. It's perceived value, which is a different animal. At the end of the day, billionaires are willing to pay $150 for an MLS team because, as others have said, that's what it's worth to them (prestige, city pride, whatever).

No CFL team has a perceived value that high.

[Ron]

It's also a factor that the CFL is in Canada alone. If you're some American super rich dealer then buying a MLS team for 150 is a lot cheaper than buying an NFL, NBA, MLB or even an NHL team for a lot more. Gets you in a game.

[1971GreyCup]

Don't forget the new stadia been built across MLS. They're investing $250m in facilities too. It occurs to me that this stadia could be dual purpose built for American football too. Is that the avenue where XFL 2.0 returns?

Super rich owners didn't get super rich by throwing good money after bad.

[argos1873]

I don't think there's any doubt that MLS is here to stay and will continue to grow in popularity. Premier League, Champions League, World Cup and Euro are all way bigger in North America than they ever were in the past, so interest in the sport is growing. MLS faces some challenges, including the belief it is well below the calibre of the European leagues, but it is here, has mostly good facilities to play in, and tons of parents are putting their kids in soccer rather than more violent and expensive sports. A major structural challenge MLS faces is being out of synch with the international soccer calendar -- this causes regular disruptive breaks in its schedule and requires it to play 10 months of the year. But the idea that the whole thing is a pyramid scheme based on suckering rich guys to pay expansion fees seems way off base to me.

Its definitely here to stay if they don't get too aggressive. I'm being a bit facetious with it being a pyramid scheme, I admit. But like you said there are challenges that the league faces, not the least of which is the perception of the league (very similar to what the CFL faces), and the quickest way they can fail is to over expand, and have franchise fires all over the place. As I've said many times, I do not wish them to fail. I also have high hopes, but don't think it will succeed, in the Canadian Premier League. It would face even more perception challenges than MLS and CFL combined, especially when the top tier teams in Canada will be playing in a foreign league. I wish somehow MLS and CPL could have some sort of agreement in which TFC, Whitecaps and Impact moved to the CPL, and there was some cooperation somehow, so that Canadian fans didn't feel like there teams were being taking away from top competition, but that we had our own viable league, like most other countries in the world. Not sure how that would happen, and probably nobody else really does, and therefore it will never happen. But one can dream.

[OV Argo]

Credible valuations of the Roughriders are around $40-45 million. This is "real value," based on actual revenue, expense, profit, etc.

Real valuations of the middle tier of MLS would probably be in a similar range. But the $150 million figure is not based on real value. It's perceived value, which is a different animal. At the end of the day, billionaires are willing to pay $150 for an MLS team because, as others have said, that's what it's worth to them (prestige, city pride, whatever).

No CFL team has a perceived value that high.

Wonder what the CFL BOG (hey - GOB spelled bacwards) types would be asking for an Atlantic expansion team franchise fee ?

IMO - they should bend over backwards to let them in for free basically - cause it would be such a huge shot in the arm for the league and all franchises; but that would fly in the face of biz-ness/profit motive & gouging deep thinking.

Also wonder what old cheap-skate Braley is expecting to get for the Lions? - did I hear he was asking 15 mil ? = that's a total joke IMO.

[AngeloV]

Wonder what the CFL BOG (hey - GOB spelled bacwards) types would be asking for an Atlantic expansion team franchise fee ?

IMO - they should bend over backwards to let them in for free basically - cause it would be such a huge shot in the arm for the league and all franchises; but that would fly in the face of biz-ness/profit motive & gouging deep thinking.

Also wonder what old cheap-skate Braley is expecting to get for the Lions? - did I hear he was asking 15 mil ? = that's a total joke IMO.

I agree with you OV. Maybe have them put up some operating capital to prove they can handle things, but I agree expansion fee if they get greedy could be a deal breaker.

[argos1873]

I agree with you OV. Maybe have them put up some operating capital to prove they can handle things, but I agree expansion fee if they get greedy could be a deal breaker.

I agree with the free or low expansion fee, as the CFL would actually be the main benefactor in this arrangement and all the risk lays on the investor, HOWEVER, how do you season seat holders feel when someone gets a seat for cheaper than you paid, because the team is desperate to put butts in the seats? Some may think its good, but many will think why did they put all this money upfront, only to have other's get even cheaper seats, at a moments notice. Also, what's the argument of some people against the Argos for example pricing their seats too low? It devalues the product. Seriously what would the sports/business world think of the CFL if they gave a franchise away for free? Only in the extreme case where this franchise somehow lifts the CFL into the sporting stratosphere would this look like a good deal. Otherwise, it will just cement into the naysayers heads that this is a 2 bit league worthy of 2 bit attention. Therefore, the CFL needs to CAREFULLY arrange an expansion fee, one that allows a group to be able to afford it, and one that doesn't make the league look like a complete joke. A fine line indeed.

[Tau Ceti]

Agree with @argos1873. A no fee expansion devalues the league. To reuse a term from above, it reinforces the perceived value of CFL teams as nil.

Rather like an engagement ring, the expansion fee shows the suitor has financial means and is serious about commitment.

Finally, there are real burdens for existing teams: expansion draft, travel costs, diminished TV share, etc. I'd offer a $9 million expansion fee and disburse it amongst existing teams. If that's too much for the franchisee then they probably weren't serious about surviving the lean years anyway.

[1971GreyCup]

Wonder what the CFL BOG (hey - GOB spelled bacwards) types would be asking for an Atlantic expansion team franchise fee ?

IMO - they should bend over backwards to let them in for free basically - cause it would be such a huge shot in the arm for the league and all franchises; but that would fly in the face of biz-ness/profit motive & gouging deep thinking.

Also wonder what old cheap-skate Braley is expecting to get for the Lions? - did I hear he was asking 15 mil ? = that's a total joke IMO.

I read somewhere that Ottawa paid an expansion fee of $4.5 -$5 million. I suspect that unless the CFL would like to return this fee, they'd better recover at least that amount from a new team. Look for MLSE to except value-added ideas to the league.

[AngeloV]

To be clear, I wasn't implying there should be no expansion fee what so ever. I meant they better not get greedy with it as Braley seems to be with his asking price for the Lions. Keeping under 5M with proof of good operating capital would be best IMO.

[1971GreyCup]

Careful not to want a tenth team so badly that they don't meet the criteria for a healthy franchise. Healthy expansion has to be the goal. Don't start with a marginal group. Keep Ottawa RedBlacks as the he model for expansion.

The Commissioner's job has to be to create value. Such as a new TV contract with cable/CBC/CTV/Global a start?