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Volume 21 No. 27
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Goldman bullish on funding MLS clubs

Goldman Sachs is all in on Major League Soccer.

The Wall Street titan lent $120 million to Orlando City Soccer Club, the fourth MLS stadium loan in the last year for Goldman, which has emerged as one of the burgeoning league’s top lenders.

“[MLS] is something that the firm is very supportive of,” said Greg Carey, global head of sports finance at Goldman Sachs. “We are willing to commit a significant amount of money to the league and the teams.”

Goldman last year lent $180 million to expansion franchise LAFC, $100 million to D.C. United, as well as to another team for its stadium that Carey declined to disclose. That likely means that Goldman arranged roughly half a billion dollars in MLS stadium financing in the last 12 months.

Goldman is not the only lender to MLS — the league’s $425 million credit line comes from Bank of America and JPMorgan — and Orlando City originally borrowed from JPMorgan and Sumitomo Bank.

Goldman’s $120 million loan to Orlando City SC was its fourth MLS stadium loan in the past year.
But the wave of soccer-specific stadiums MLS is now known for increasingly is being funded by Goldman, a major player in financing venues in other sports.

Sumitomo and JPMorgan first extended an $80 million loan to expansion Orlando City in late 2016 to launch the new stadium. The banks expected to refinance the two-year bridge loan early, but Goldman, sources said, swooped in with a better offer late last year.

Of the now $120 million loan, $90 million is directed at the stadium funding, and $30 million to the team. The club itself confirmed the loan but said it could not discuss the subject further because of a nondisclosure agreement.

The Orlando City loan is for five years, and Goldman kept half of the $120 million, and syndicated the remainder to other financial institutions (banks commonly sell off pieces of loans in a process called syndication to limit risk exposure).

Goldman’s Carey cited several reasons for his MLS bullishness: the strong popularity of new teams like Atlanta United; sponsorships ranging from the leaguewide Adidas contract to local deals such as D.C. United’s naming rights with Audi; and solid local owners ranging from the Krafts in Boston to the new owners of expansion Nashville, which includes the Wilf family, owners of the Minnesota Vikings.

He also pointed to the customer base of MLS: Millennials, the target audiences many advertisers are trying to reach. Many of the success stories in MLS, from Portland to Atlanta, are driven by younger fans. For example, AMB Group, which owns the Atlanta Falcons and Atlanta United, has said there is only 3 percent crossover between the fan base of United and the largely older audience of the Falcons.

Carey also expects MLS’s next round of media deals to result in higher fees. The first round is this year with the league’s international contracts expiring.

Last month, MLS Commissioner Don Garber told SportsBusiness Journal’s Dealmakers in Sports conference that Soccer United Marketing, MLS’s television and marketing arm, is worth $2 billion.