At the Los Angeles Football Club’s University Hills training facility, some ten weeks after winning its first Major League Soccer title in a thrilling penalty shootout, co-­owner Bennett Rosenthal is still processing his team’s spectacular season. “It’s a life experience that you don’t expect,” the 59-year-old says. “I think we’re all still smiling every day.”

Now Rosenthal has something else to celebrate – Forbes estimates that LAFC is worth $1 billion, just nine years after it joined MLS for an expansion fee of $110 million, making it the league’s first billion-­dollar franchise. That’s more than double the $475 million Forbes determined it was worth in 2019, the last time we assessed North American soccer teams.

That’s an impressive return, but not one Rosenthal was banking on. “We did not do this because we thought it was the best place to put our capital,” says the cofounder of the $341 billion (AUM) Ares Mana­gement, who made his fortune finding profitable alternative investments. “We thought it could be fun and we’re making a great macro bet on the growth of the sport.”

LAFC’s ascent is the latest sign of just how much MLS has grown since it was founded in 1996. There are now 29 teams in the league – it began with ten –, with St. Louis City SC set to debut this season. Since 2019, the average team valuation has climbed 85%, from $313 million to $579 million. And the price tag for the next expansion team (likely Las Vegas or San Diego) is expected to be $500 million, according to a well-placed industry source, a consi­derable increase from the previous record of $325 million set by billio­naire David Tepper when he foun­ded Charlotte FC in 2019.

Billionaires have long believed in the potential of MLS. New Eng­land Patriots owner Robert Kraft and entertainment mogul Philip Anschutz were among MLS’ original owners, and a slew of others – ­including Tepper, Morningstar founder Joe Mansueto (Chicago Fire, 2018) and Qualtrics’ Ryan Smith (Real Salt Lake, 2022) – have since gotten in the game and driven up team values.

“It’s less of a financial hurdle to control an MLS team than [in] some other sports, so you do see more people who can do it,” says Rosenthal, who is worth an estima­ted $1.3 billion. “But I think people love it. They want to be a part of the community and the trajectory.” Forbes estimates there are at least 19 billionaires or members of billionaire families who have key ownership stakes in MLS franchises.

Rosenthal, who fell in love with soccer while managing his daughter’s team, and Apollo Global Management partner Larry Berg, who played the sport from age eight, became LAFC minority owners in 2014. The two knew each other well from the private equity world and had together invested in Italian soccer club A.S. Roma. “To be honest,” Berg says, “MLS wasn’t really sexy yet.” In 2016, they increased their stakes and became LAFC’s co–managing owners along with Riot Games cofounder Brandon Beck, who had invested in 2015, each agreeing to rotate as the team’s lead owner every four years. Rosenthal took on that role in Janu­ary. As befits a team in LA, several celebrities (including Will Ferrell, Magic Johnson and Mia Hamm) have minority stakes in the club. Golden State Warriors co-owner Peter Guber is LAFC’s executive chairman. Mean­while, LAFC built a $350 million, 22,000-seat soccer-specific stadium and barnstormed soccer bars and held pep rallies to build interest. It even sent fans to a match in Germany to study European fan culture.

Those investments have paid tremendous dividends. LAFC has sold out every MLS regular season and playoff match since its first kickoff in 2018. Celebrity superfans are frequently seen in the stands, with Justin Bieber and Wiz Khalifa attending the MLS Cup in November. And LAFC turned an estimated $8 million operating profit on a leaguehigh $116 million in revenue last year. That figure is set to rise in 2023, with BMO agreeing to a league-record 10-year, $100 million stadium naming rights deal.

Just how far can LAFC and MLS go? More than half the clubs lose money and, with average reve­nue at $55 million, MLS teams can’t really compete against Europe’s soc­cer clubs for top players. “A billion dollars is a huge number. Nine times, eight times revenue is huge, parti­cularly when you’re locked in to a certain degree on your media rights,” says Edwin E. Draughan, a vice president at sports investment bank Park Lane. (Manchester United, by contrast, is valued at $4.6 billion, or 6.9 times revenue.) The future for MLS investors is predicated on how much soccer continues to grow in North America, with hopes pinned on a new annual tournament be­tween MLS and Mexico’s Liga MX kicking off in 2023. And in 2026, soccer should get another big boost when the United States, Canada and Mexico cohost the next World Cup.

Even more crucial is MLS’ new media rights deal with Apple, which has unified the league’s local and national broadcast rights under one umbrella. The arrangement guarantees MLS at least $2.5 billion over ten years, and possibly more based on subscriptions. It’s a big payday, but less than the $300 million annually the league reportedly expected, es­pecially given that MLS must pay the production costs. While MLS has added ancillary TV deals with Fox, Univision, TSN and RDS, no major North American sports league has committed to a streaming-first strategy. Rosenthal: “Everything’s a gamble, but it’s a really smart bet.”

Text: Justin Birnbaum
Photo: Tim Tadder for Forbes