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Leiweke: Toronto FC revenue will double in wake of major player signings
But controversial signings pose challenges for MLS and other teams
March 19, 2014 01:46 PM
The increases will come from ticket, sponsorship and media revenue that will follow better play on the field and an increase in interest in the club as a result of new players like Michael Bradley and Jermaine Defoe, he said.
Leiweke, who was speaking on the opening panel of the 2014 IMG World Congress of Sports, said that total revenue at Toronto FC will increase to more than $75 million and the value of Toronto FC will grow from the $10 million MLSE paid for it in 2005 to $250 million in the coming years.
“These guys will end up paying for themselves,” Leiweke said of the new players. “We currently lose money. We’ll lose money again this year, but it’s a price our owners are willing to pay to be where we want to be. We have a shot of making that team one of the two or three most relevant brands in all of Canada.”
The signings were controversial in MLS, which is a single-entity league. Philadelphia Union President Nick Sakiewicz said Leiweke was “breaking the bank” and that he was “frustrated” by the signings.
MLS Commissioner Don Garber, who was on the panel with Leiweke, acknowledged that the signings had been controversial, but said that they were important for the league as it looks to become one of the top leagues in the world.
“It’s a big part of our strategy to ramp our investments so the quality of play can compete with all the imported soccer coming into North America,” Garber said. “But at the end of the day, you want to pay players effectively so you can manage your overall spending in respect to your revenue. When you have one team spending $25 million and another spending $4 million, it creates all sorts of issues that could be positive and challenging. … Overall it’s a very positive thing.”
Seattle Sounders and Seahawks President Peter McLoughlin said that the value of signing those players was on display when Toronto FC beat the Sounders 2-1 last weekend. But he said that the way that the Sounders looked at their biggest signing in recent history, Clint Dempsey, was different.
“I really struggle with operating a money-losing operation,” McLoughlin said. “People can make that decision that they want to make the investment on a negative cash flow basis to grow the asset value. But what keeps me up at night is losing money. We made a big investment with Clint Dempsey, and the impact it has on your bottom line is something that has to be considered smartly and objectively. I’m sure Tim did. I know we did in Seattle.”
McLoughlin added that both the Sounders and Seahawks are profitable.