- Posted by Drew Epperley
- On July 11, 2012
- 0 Comments
- Features, Jason Levien, Will Chang
Yesterday’s big news with D.C. United made waves across the land. Erick Thohir and Jason Levien purchased ownership stakes in D.C. United from Will Chang and according to reports have even taken over the majority stake in the club from Chang.
Forbes is reporting today that the 60% that is now owned by Levien and Thohir could be valued at $50 million – a new record for a MLS club.
The D.C. United deal is the most expensive in the league’s history. The original 10 owners chipped in $5 million each and the inaugural season was 1996. Subsequent MLS expansion fees have increased from $10 million to $40 million, the amount paid by the league’s most recent team, the Montreal Impact. Thus MLS valuations have increased at a compound annual rate of 15% over the past 16 years, easily beating the 7% annualized total return for the S&P 500. That said, keep in mind that annual capital calls due to league losses, as outlined in this report, likely negated the excess returns for most owners.
Teams may still be losing money but hearing that the value of each club is increasing is positive news for the league as a whole.