Wednesday, September 10, 2008

How Much are the Wizards Worth?

How much do you think the Wizards are worth? $10 million? $20 million? The answer is $22 million, at least according to a new Forbes magazine article about MLS’ most valuable franchises. The numbers, which are taken from last year, have the Wizards as the least valuable franchise, $1 million behind the Crew. Much of this is due to the lack of their own stadium, and currently playing in a minor league baseball park. The team also ranks last in revenue, with only $5 million a year in revenue. While the team’s not making a lot of revenue, they are making more revenue, then they are losing in operating income, where they’re only losing $2.9 million a year, less then DC United, Chicago Fire, New York Red Bulls, and Columbus Crew.

Much of the reason for these low numbers has to do with the lack of their own facility, where they control the revenue. Looking at the list, franchise value and revenue for team’s goes up when they are in their own stadium, compared to when they rent (as the Wizards are doing now), where they have to split or get very little revenue, from things like concessions. The other thing that will eventually add more value and revenue to the team is a shirt sponsor deal that gives the Wizards more value as well.

As you’d expect, LA is the most valuable franchise in MLS ($100 million), over double the price of the second most valuable franchise, Toronto ($44 million).

2 comments:

Greg said...

The Forbes survey doesn't take into consideration the significant capital expenditure and resulting equity that OnGoal has placed in its top-in-League training center and KCW Juniors programs. Those two entities are not technically under the "Wizards," but demonstrate significant commitment to the long-term growth and financial security of the club.

Aljarov a.k.a Al Clark said...

How can any team be worth less than the going rate for an expansion club? Not possible. Even if they wanted to cut most, if not all the players, there's still more there than a new franchise.