From athletes and actors to venture capitalists and billionaires—investors are spending hundreds of millions to stake a claim in the next sports gold rush: soccer teams. And it’s not just in European markets—Major League Soccer is now averaging more fans per game than the NBA, NHL, and MLB; and the average MLS franchise has grown at five times the rate of other U.S. pro leagues over the last few years.
Here’s an inside look at the growing U.S. and European soccer market and why soccer teams are such an opportunity space for American investors.
Here’s an inside look at the growing U.S. and European soccer market and why soccer teams are such an opportunity space for American investors.
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00:00From celebrities to venture capitalists, investors are spending millions to tap into the next
00:09sports gold rush — soccer teams.
00:11I'm involved in sports ownership, there's a soccer club in the U.K. I'm a part of.
00:16Unlike other professional sports investments, soccer teams can have a much lower barrier
00:20to entry, with the opportunity for bigger returns later down the road.
00:25And it's not just in Europe.
00:28The world's game has really gotten a foothold in America.
00:32But there are risks.
00:33It takes almost as much work and money to have a team that doesn't perform as much
00:37as it does to have a team that does perform.
00:39Here's an inside look at the rewards and perils of investing in the other kind of football,
00:44and what's driving the growth of this multi-billion dollar industry.
00:47Ryan and Rob, how would you sum up that experience tonight?
00:52I'm not sure I can actually process what happened tonight.
00:56In 2021, Ryan Reynolds and Rob McElhenney bought the Welsh football team Wrexham AFC
01:01for some $2.5 million.
01:04It's an underdog story, and it's about interconnectivity between the club and the community.
01:09Just three years later, the Wrexham team is worth about $11 million, a more than four-fold
01:14increase.
01:15They're part of a growing group of A-listers to throw their support behind European football
01:19leagues.
01:20There are opportunities to invest in foreign clubs at a substantial discount relative to
01:25what the franchise fee is for a major league soccer.
01:27Brett Johnson is the CEO of Benevolent Capital, a Los Angeles-based venture capital firm that
01:33specializes in professional sports investments.
01:36Johnson is part owner in several soccer clubs both in and out of the U.S., including Itswich
01:41Town FC, a football team that dates back to the 1870s.
01:46What makes the sport so interesting overseas is the risk of relegation or the carrot or
01:53the allure of promotion.
01:55The relegation and promotion system is a cornerstone of European football culture.
02:00Sants, two years ago, we played so bad.
02:02We had to drop down from the Premier League to a lower league that was called...
02:06The Championship.
02:07See, that don't make sense.
02:09Teams play in different divisions and have the opportunity to be promoted up or relegated
02:14down based on their performance.
02:16With promotion and relegation, there are opportunities to buy lower-level clubs relatively speaking
02:21at discounted valuations.
02:23In the U.S., buying a team in the NFL or NBA typically costs billions of dollars.
02:29Meanwhile, a mid-tier European soccer team can be purchased for just a fraction of that,
02:34offering a relatively low entry point for would-be investors.
02:38So as an example, when we bought Ipswich, we bought it at League One, so the third level
02:42in the soccer pyramid.
02:43Since Johnson's group acquired the team, Ipswich has been promoted twice, rising through
02:48the ranks to the Premier League.
02:50The Premier League is the top level, and I would argue the most prominent league in
02:53the world.
02:54So the benefit, again, of promotion is you can look at buying lower-level clubs, discounted
02:59prices.
03:00If you are so fortunate to get them promoted, you could see that appreciation increase substantially.
03:05You also have the risk that you buy a club at any level and can see it relegated.
03:09The Premier League is the world's largest revenue-generating football league.
03:15On average, most Premier League clubs can expect well over $100 million in media rights
03:20payouts per season, while MLS clubs receive about $8 million per season.
03:25The difference in terms of media rights, the difference in terms of revenue, in terms of
03:29gravitas for a team that's promoted to the Premier League is staggering.
03:34Now U.S. investors want a slice of the growing pie.
03:39Just 20 years ago, there were no majority American owners in the Premier League.
03:43Now nine of the top 20 teams are controlled by U.S. investors, from billionaires like
03:47the Glazer family to massive conglomerates like Fenway Sports Group.
03:51Some of these investors are betting on further growth when it comes to media rights.
03:55Ah yes, you're in it now, the Premier League.
04:03Even though the Premier League has one of the largest fan bases in the world, it only
04:07brings in about $4.2 billion in annual media deals.
04:11With just a fraction of that fan base, the NFL takes in more than double that amount,
04:16about $10 billion each year.
04:19Some investors are hopeful that greater investment will come from streaming services, looking
04:23to cash in on the Premier League's massive global audience.
04:27Peacock is the streaming home of the Premier League.
04:31Now investors are finding opportunities in the U.S. soccer space.
04:36Like at Los Angeles Football Club, or LAFC.
04:40As long as you are taking it seriously, running it like a business, the valuations tend to
04:46go up.
04:47Larry Friedman is the co-president and CEO of LAFC.
04:51He's been a part of the club since it first began in 2014.
04:55We are in a great market that enables us, with the building we built and the investment
05:00we made in the building, we're able to drive one of the top handful of average ticket prices
05:08in the league.
05:09In 2024, LAFC became the most valuable Major League Soccer team, with a valuation of $1.2
05:15billion.
05:16But it has taken a long time for LAFC, and Major League Soccer, to get to this point.
05:22This league started back in the mid-90s.
05:25The first 10 plus years was a struggle, and then some things started to click.
05:33And you saw soccer-specific stadiums like BMO Stadium getting built.
05:38But over the last five years, U.S. soccer viewership has skyrocketed.
05:42In 2022, the FIFA World Cup Final drew 26 million U.S. viewers, more than the NBA Finals,
05:48the World Series, Stanley Cup, and even the Winter Olympics.
05:52Just two years later, a record-breaking 12.1 million fans attended Major League Soccer
05:57matches in the U.S.
05:59That's more than a three-fold increase since 2010.
06:02This is an incredible time to be invested in soccer.
06:06The World Cup is coming back in 2026.
06:09Lionel Messi, the greatest player certainly of this generation, and arguably the greatest
06:14player of all time, now plays for Miami.
06:17All levels of United States soccer are doing very well.
06:19This growth is also reflected in the skyrocketing expansion fees to join the MLS.
06:25We acquired our expansion rights for the city of Los Angeles for $110 million.
06:31A year and a half, two years ago, the ownership group in San Diego acquired expansion rights
06:37in MLS for that market for $500 million.
06:40Still, U.S. soccer isn't always a lucrative business.
06:43Less than half of MLS teams actually turn a profit.
06:46LAFC has managed to stay ahead of the curve by finding creative ways to maximize its stadium space.
06:5217 home MLS games does not a business model make.
06:57We are in the food and beverage business.
06:59We are in the merchandise business.
07:01We are in the customer experience business, the live entertainment business.
07:05Go LAFC!
07:07Tech giants are getting in on the soccer frenzy, too.
07:09In 2022, Apple acquired exclusive rights to stream MLS matches in a $2.5 billion deal.
07:19It wasn't a deal for a rights fee, like all of the other leagues typically do.
07:26It was a partnership so that the more we succeed together, the better off we both will be.
07:34And the growth goes beyond Major League Soccer.
07:36Other divisions, like the National Women's Soccer League or the United Soccer League,
07:40provide opportunities for smaller-time investors.
07:43I think an alternative way of looking at sports investing is like what I'm doing and what
07:48a lot of other people are doing, which I would call kind of emerging sports, emerging leagues.
07:52The franchise fees are much lower for United Soccer League versus Major League Soccer.
07:57So it provides, if you will, a lot more oxygen for the capital that you would raise and you would invest.
08:02Still, investing in any professional soccer league, whether in the U.S. or abroad, is a risky business.
08:08So plenty of examples of investors that have bought Premier League clubs and seen themselves relegated.
08:13They bought League One clubs, seen themselves relegated.
08:15So there's clearly an inherent risk.
08:18If a team drops in the rankings or falls into a lower division, they may lose top players
08:22and coaches as they cut costs.
08:24While U.S. teams don't face the same volatility tied to a relegation system, the stakes and
08:29the returns on investment aren't as high either.
08:32From my perspective, the lack of what I would call promotional relegation in American sports
08:37means it turns off your fan base in most instances.
08:41And also you get a lot of ownership groups that will literally effectively just dial it in.
08:45Don't spend a lot of time putting a good product on the floor.
08:49Don't put it on the pitch.
08:51There's no fear of relegation, but I would argue that it makes the product less compelling.
08:57That's why when it comes to soccer leagues, investors are willing to play the long game.
09:01It's not that long ago where the NBA wasn't all that.
09:05And you look at it now and the NBA is an incredible global property.
09:10I expect that coming out of 2026, there is going to be a substantial increase in the
09:17interest in our league.
09:19It's a lot of work.
09:20It's a lot of capital.
09:21It's a lot of time.
09:22I just always try to caution people that you're not always going to get promoted, you're not
09:26always going to win the trophy, you're not always going to get the huge sponsorship and
09:29media rights deals.
09:31It all takes time.