Major League Soccer - Organization - Profitability

Profitability

Major League Soccer lost more than $350 million between its founding and the year 2004, according to a report by BusinessWeek released that year. However, there have been positive signs of long-term profitability since 2004. As soccer-specific stadiums are built, ownership expands and television coverage increases, MLS has seen its revenues increase while minimizing costs. The 2003 season saw the Los Angeles Galaxy make a profit in their first season at The Home Depot Center, while FC Dallas turned a profit in similar fashion after moving into Pizza Hut Park in 2005.

Television coverage has consistently expanded throughout the league's history, as MLS brokered a deal with ESPN in 2006 for rights fees and a greater presence across its networks. The 2007 season saw the return of MLS to Univision and its Spanish-language networks. They joined Fox Soccer Channel and HDNet as the U.S. national outlets, and the league has mandated that every league game receive television coverage either nationally or locally in one or both teams' cities for broadcast on its Direct Kick package.

In 2007, MLS teams started selling ad space on the front of jerseys to go along with the league-wide sponsorship partners who had already been advertising on the back of club jerseys, following the practice of international sport, specifically soccer. The league has established a floor of $500,000 per shirt sponsorship, with the league receiving a flat fee of $200,000 per deal. Online gambling and hard liquor sponsorships are prohibited. As of June 2012, fifteen teams have signed sponsorship deals to have company logos placed on the front of their team jerseys, and another team is directly owned by its shirt sponsor.

MLS Commissioner Don Garber said on May 11, 2006 that he expected the league's clubs to be profitable by 2010 overall. He reported that FC Dallas and the Los Angeles Galaxy were already profitable, with several other clubs nearing profitability. A year later, he revealed that the Chicago Fire, the Colorado Rapids, and Toronto FC were on track for profitability by 2008. However in 2008 there were only three profitable MLS clubs; Los Angeles Galaxy, Toronto FC and FC Dallas. According to the League, in 2009 there were only two profitable MLS clubs, the Seattle Sounders FC and Toronto FC.