Chris Smith has an interesting article over at Forbes today, discussing MLS financial growth and some of the challenges sure to face the league in the coming years. However, the article is also fascinating because it ranks all current MLS clubs and their respective valuation.
The takeaway? Chivas USA ranks dead last in franchise valuation, at $64 million. Although that means the team has increased in value since Jorge Vergara and the Cue brothers bought into it in 2005, it is far short of expansion side New York City FC's reported $100 million buy-in fee this year, and it ranks an absolutely embarrassing amount behind the leading club, Seattle Sounders, coming in at a $175 million valuation. Even the next least-valuable club, D.C. United, was still judged to be worth $71 million.
What's more, Chivas is tied for last in revenue for 2012, with $15 million, which they shared with the San Jose Earthquakes, who play in the league's smallest stadium, one they do not own. And that's the shared link between the Quakes and D.C., both of which are in various stages of planning and building a new stadium. Chivas USA? Not yet even in the planning stages of building a stadium of their own, at least publicly.
And just to add insult to injury, Chivas' operating income is in the red, and second worst in the league at -$5.5 million, behind only the profligate New York Red Bulls' -$6.3 million deficit. The Goats and Red Bulls are not the only teams to be operating without a profit, as a total of eight clubs are in the hole, but that's not necessarily a club that most teams want to belong to.
The figures are based on 2012 numbers, before Vergara took complete control of the club, and then proceeded to slash costs. It is unclear if his cost cutting measures might have helped Chivas USA's bottom line, what with dispensing with marketing and so forth, but with attendance hitting beyond abysmal levels in 2013, one figures the revenue stream got even smaller this year. Still, that is speculation at this point.
So while MLS appears to be growing well and most clubs look like they are in good shape or at least have plans to help their financial health in the near future, Chivas lag well behind the pack. In many respects, these figures only confirm what many observers have long believed about the club. And with the team coming off another terrible season on the field, the chorus to move or fold the team will continue to sing loudly. This team is at an absolutely critical point, and without positive financial improvement very soon, they will not only remain well behind the other teams in the league but may also call their very survival into question.
What do you think? Leave a comment below!
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