Miami is the new hub for sports investments: This is how the US MLS is reshaping the global map of sport’s business
Messi’s arrival in the US MLS (Major League Soccer) happened at a tipping point for Miami. The US city is already experiencing a “seismic” growth both nationally and internationally in terms of sports, fashion, food and finance investments. It so happens that Miami has also become a world reference for the top sports including basketball, football, baseball, tennis, golf and now even soccer.
Despite MLS’ reputation as a secondary market where players from Europe and Latin America’s top leagues come to retire, over the last decade the league has made extraordinary progress, in terms of viewership, sponsorship, media rights and player acquisitions. Messi’s arrival is no doubt going to propel the leagues’ growth both in terms of profitability and notoriety. According to a recent report by Parks Associates, revenue from sports streaming subscription alone is expected to increase 73% to $22.6 billion in 2027 after generating $13.1 billion in revenues last year. MLS will receive at least $250 million per season from Apple. The MLS league averaged $100 million per season under its previous eight-year agreements with Fox, ESPN and Univision.
What is more, as of recently FIFA, the football governing body is securing a location in the upscale Miami neighborhood of Coral Gables to make Miami its long-term North American base. This is well timed, as the US, together with Mexico and Canada prepares to host the World Cup in 2026. This is a great move as FIFA prepares to expand its format to 48 teams by 2026.
Inter-Miami Valuation and Revenues
In the minutes after it was reported that Messi would be moving to the US, ticket prices for Inter Miami matches soared by more than 1,000%. Once Messi arrived in Miami in late July, Inter Miami’s ticket price grew by 550%. At that time the team still ranked last in the Easter-Conference. Miami underperformed the league losing the last 5 matches. Messi’a arrival changed all that, affecting also Inter’s asset value. The team has won all the six matches played since Messi joined, and the team could be on a path to win this year’s main trophies. What is more, as of the first week of August, Ares Management confirmed investing an extra $75 million in Inter Miami CF, to develop the Miami Freedom Park stadium and fund hotels and shopping malls that would boost the holding revenues and other growth initiatives. Ares has invested a total $225 million in Inter Miami since 2021.
Co-owner of Inter Miami Jorge Mas expects revenues for the club to double over the next year, as ticket prices for Messi’s first appearance soared to more than $300 each. According to shareholders of Inter Miami valuation could reach between $1.6 billion in the next year. Forbes’ most recent estimate put Miami as MLS’ 11th most valuable team, worth $600 million. From a financial standpoint, Messi was a valuable marketing play which increased the team’s brand equity manifolds.
The next wave of revenues for MLS
As MLS goes mainstream, expect the leagues to grow a massive international following. Up to $15 billion dollars are expected to be invested into infrastructure upgrading (across all major’s sports including soccer) over the next 8 years. This will result in greater fans access to stadiums and therefore more revenues. Fans engagement will accelerate also through greater digital transformation, providing sports aficionados tech-based interactions solutions and tokenomics-based rewards. For instance, the hyper-realist metaverse will become a reality and fans will be able to join matches through affordable virtual participation globally. Inter Miami alone can build a hundred million global fans community, attracting the millions of Latinos that are galvanized by the Argentine’s world champion’s momentum. What is more, video games, decarbonization and new soccer stadium branding rights will generate more revenues for the MLS franchise.
The Messi effect: Negotiations to bring Messi to Miami started in 2019, when Mr. Mas and Beckham travelled to Barcelona to meet with Messi’s dad. This is how long it takes to reach agreements with the soccer stars. The Messi effect is visible across the entire state of Florida and beyond. Tickets for matches are oversold at skyrocketing prices, merchandising is sold out, and more European soccer players particularly from Spain, Italy and France will come to the US as it is becoming the most attractive soccer destination. Ticket prices all around the league are soaring as fans eagerly await Messi’s first visit to play against their teams with his new club. The biggest increase in ticket prices was for Miami’s game against the New York Red Bulls, with ticket prices soaring by 1,236% for Messi’s first trip to the Big Apple in August.
With over 500 million followers on social media, Messi is going to catapult advertising, and commercial opportunities for soccer in the US. Messi, like Pele, the Brazilian legend that joined the New York Cosmos in 1975 have made and are making soccer one of the most lucrative sports and investments in the US.
The new soccer leaders on the block: The US and Saudi Arabia are “going all out on soccer” reshaping the global market for soccer leadership. Both countries will compete for the top players, and top tournaments to capture part of the business. The US will host the FIFA world cup in 2026, and Saudi is hoping to be the host for 2030. Saudi has the cash, and the US has the sport franchise, and knows how to monetize sports. Expect the shift of power and investment to converge towards these two regions, while Miami takes full advantage of the first mover momentum.Business
Articles from Andrea ZanonView blog
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