When the news dropped last week that billionaire Marcelo Claure now has a 10% stake in New York City FC, Sportico ran a post that valued the club at $1.5 billion — and by extension his investment at $150 million.
But that $1.5 billion figure raised some eyebrows over here at Hudson River Blue headquarters. This past January, Sportico valued NYCFC at $840 million in their annual assessment of Major League Soccer, putting the club in Fifth Place behind only LAFC, Atlanta United, Inter Miami, and LA Galaxy. It was in line with the $850 valuation that Forbes posted shortly after.
Could Sportico's valuation of the club really jump $660 million in nine months to $1.5 billion? Well, yes and no.
NYCFC + stadium = $1.5 billion
To arrive at that sum, Sportico is factoring in both the current value of the club the projected value of the "ridiculously great"stadium that New York City expect to inaugurate in 2027. When the stadium project was announced in November 2022, the proposed budget was $780 million.
NYCFC President and CEO Brad Sims provided some clarity in a media roundtable earlier this week. "Depending on what publications you read, and I won't comment on those, roughly some valuations of the team and some projections of how much the stadium is going to cost are pretty close to the same amount," he said. "We went from being one company in New York City FC, to now, we have a company New York City FC, we have a company that's the stadium company, and then we have a holding company that's over the top of those two companies."
In other words, there are now three companies: The soccer club, the stadium, and a holding company that controls both. The soccer club is valued at a little over $800 million, the stadium is valued at a little under $800 million, and those two entities fall under a holding company that Sportico now values at $1.5 billion.
Andrew Leigh
But you said the stadium doesn't count
The valuation is confusing given that Sportico and Forbes both explicitly explain that they do not include stadia in their annual valuations.
It makes sense. While more MLS teams are building soccer-specific arenas, teams such as Atlanta United, Charlotte FC, and New England play in NFL stadia, and the clubs themselves are owned by individuals who also own the NFL teams that call those arenas home. Sportico and Forbes seem to avoid the question of how to include those properties by avoiding the category entirely.
For example, Mercedes-Benz Stadium, home to Atlanta United, is one of the most spectacular sports venues in the world and reportedly cost $1.5 billion when it opened in 2019. But it's not exactly a club asset.
If Sportico and Forbes maintain their current standards, and don't include stadia when the new valuations are released in early 2025, New York City will presumably receive an incremental increase over the $840 million (Sportico) and $850 million (Forbes) from earlier this year.
Oliver Strand
Oliver Strand
10% of what?
Back to the matter at hand: What is the valuation of New York City FC?
We can make an educated guess based on what Sims told us about the share controlled by the New York Yankees. Sims clarified that they now own 10% in the holding company: The Yankees essentially traded their 20% in the cub for 10% in the holding company that will also own the stadium. "Essentially, because the valuations were where they were, 20% of what was the team company vs 10% of what is this holding company are equivalent stakes," Sims said.
If the stadium's price tag is $780 million, that would make the holding company worth $1.5 billion. But is the stadium worth $780 million? That's the budget to improve the land and complete the structure, and the final complex could be worth significantly more. Or it could be worth less: The stadium is in the LaGuardia Airport flightpath, which means the land will never support the high-rise cash cows of New York City real estate.
To be clear, nobody spoke to Sportico on or off the record about the valuation. As the publication noted, "An NYCFC representative declined to comment on the valuation, or to say who he was buying from. An attempt to reach Claure via LinkedIn wasn’t immediately successful."
In other words, the numbers are made-up. To quote what we posted earlier this year, “Both Sportico and Forbes claim that they survey MLS executives and gain insider information based on granting anonymity. But neither publication publishes raw numbers.”
In this case, the "insider information" seems to be an unanswered DM sent to Claure on LinkedIn.
But $1.5 billion looks good in a headline.
