LAFC Stake Sale Hits $1.25B Valuation
A major stake in LA's MLS team, LAFC, has been sold at a $1.25 billion valuation. The deal sees Alibaba co-founder Joe Tsai exit while star player Carlos Vela joins the ownership group, highlighting the convergence of tech money, celebrity capital, and institutional investment in high-growth sports franchises.
LAFC's valuation has seen a dramatic climb, underscoring the rapid appreciation of MLS franchises. The club's value surged from approximately $475 million in 2019 to becoming the league's first billion-dollar team in early 2023. This recent $1.25 billion valuation solidifies its position as one of the most valuable clubs in Major League Soccer, trailing only Inter Miami CF. The transaction is part of a broader trend of soaring MLS valuations, with the average club's worth increasing by 85% between 2019 and 2023. This growth is fueled by factors like the league's 10-year, $2.5 billion media rights deal with Apple and the expansion fee for new teams reportedly reaching as high as $500 million. This deal also highlights the increasing role of private equity and institutional capital in sports. Major League Soccer has established specific rules to govern these investments, requiring funds to have at least $500 million in committed capital and limiting stakes to a maximum of 20% of a club's equity. These regulations are designed to inject capital while maintaining a controlled ownership structure. The exit of Alibaba co-founder Joe Tsai, who also owns the Brooklyn Nets, and the entrance of a club legend like Carlos Vela, signal a shift in the investor landscape. Vela joins a small but growing number of former players who have taken ownership stakes in their clubs, a move that deepens the connection between the team and its icons. The upcoming 2026 FIFA World Cup, with eight matches scheduled for Los Angeles, is a significant catalyst for future growth. The event is projected to have an economic impact of over $1.1 billion on Los Angeles County, creating a lucrative environment for teams like LAFC and further driving investor interest in the city's sports franchises. In the competitive Los Angeles market, LAFC's valuation places it among the city's elite sports properties. While NFL teams like the Rams are valued at over $10 billion and the Lakers at $10 billion, LAFC's rapid growth in a much younger league demonstrates the rising financial power of soccer in the U.S. The city's sports industry generated a staggering $12.1 billion in economic activity in 2024, showcasing a robust and expanding market for investors.
