Financial Returns in Major League Soccer

Abstract

Major League Soccer (MLS) is the top-tier professional soccer league serving the United States and Canada. This study examines factors hypothesized to impact consumer demand for professional sports on team revenue in this nascent league. The estimates are consistent with positive returns to performance, novelty effects from newer teams, and varying impacts from roster quality and composition. Other factors hypothesized to be important for MLS teams (e.g., stadium quality and market demographics) are not associated with team revenue. The estimates are similar to findings in other major North American sports leagues, even though MLS operates with a unique single-entity ownership structure that has the potential to disincentivize individual team investments by league owners.

Keywords

soccer professional sports leagues consumer demand for sports novelty effect revenue sharing

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