If MLS owners aren’t making money from their franchises, why would they even want to own one?
This is a question that has been bouncing around in my head for quite some time.
It resurfaced the other day as I was listening to Joe Rogan and Reggie Watts commentate on a video of Robert Kraft, owner of the New England Revolution and New England Patriots, meeting with Vladimir Putin. In the video, Kraft hands Putin a Superbowl ring and Putin never gives it back. Joe and Reggie thought it was hilarious. So did I.
This got me thinking about how sports owners can leverage their teams to do things that sports fans may not notice or understand.
So, I called Gary Kleiban, 3four3’s Founder, to discuss the reasons why someone might want to own an MLS franchise and how ownership is far, far more important than positions in coaching and management, especially for minorities.
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I agree with the two main reasons for owning a club that you discussed, but I would reverse them in order of importance.
Most important is the boost to profile the team gives the owner and the owner’s other businesses. That’s probably better than any marketing dollars they can spend on their companies. Also, the owner’s box makes a good setting to do deals and owning a team is great for networking.
The potential ROI is gravy. As you both mentioned, it’s usually a small percentage of the owner’s net worth.
Plus, that ROI doesn’t exist if future owners aren’t willing to buy the team for the profile boost since, as you also mentioned, the cash flow from operating the team is pretty lousy.
Hey Seth,
Thanks for listening and thanks for the comment.
I usually think of Chelsea’s owner Roman Abramovich entertaining people in his owner’s box. I’ve always been curious who the people are, what they’re talking about, why they’re there.
Interestingly, his Wikipedia page highlights the clubs *record* losses ($140 million) early on in his ownership of the club. The page also provides plenty of details of his other political and business dealings. I think it is a great insight into the role of the club in comparison to his overall portfolio.
https://en.wikipedia.org/wiki/Roman_Abramovich