(And that’s a conservative estimate)
By Jake Cohen | Photo by LAFC
Glance at the photos of the the 22-person LAFC ownership group holding up their beers at the press conference and it’s easy to imagine that they’re bunch of friends who decided to take up the expensive hobby of running a sports franchise. A closer look, however, reveals a web of linked business interests among the individuals — and an impressive record of putting their money in smart places.
A very conservative estimate of this group’s collective net worth is $4.5 billion. Figures aren’t available for all members, and the numbers we do have aren’t perfect, but here is a sample based on data compiled by Forbes:
- Vincent Tan — $1.6 billion
- Tony Robbins — $480 million
- Chad Hurley — $335 million
- Magic Johnson — $500 million
- Ruben Gnanalingam — $360 million
The size of the group suggests that a number of the owners won’t be all that actively involved — though perhaps Tony Robbins can handle the half-time talks — but that really doesn’t matter. What might initially look like a random hodge-podge of rich and famous people begins to make more sense when you look at the other ways they work together.
There is significant involvement from investors and executives of the NBA’s Golden State Warriors, Serie A’s AS Roma, and the production company Mandalay Entertainment. In addition, many of the venture capitalists in the group have done some very lucrative deals with one another.
- Peter Guber (LAFC executive chairman) and Magic Johnson are both part of the LA Dodgers ownership group, and Irwin Raij represented their group during the sale.
- Bennett Rosenthal and Larry Berg worked together at an investment fund and are AS Roma co-owners. Mia Hamm is on Roma’s board of directors. (She likely got involved with Roma after meeting principal owner James Pallotta in Boston, where her husband and fellow LAFC co-owner Nomar Garciaparra played baseball for the Red Sox.)
- Mike Mahan and Paul Schaeffer work with Guber under Mandalay Entertainment.
- Guber co-owns the Warriors with Joe Lacob, the father of LAFC co-owner Kirk Lacob. LAFC co-owners Rick Welts and Brandon Schneider work for the Warriors, as president/COO and VP of ticket sales, respectively. Tom Penn, another former NBA executive, will serve as LAFC’s president.
The club plans to spend over $250 million before the team even takes the pitch in 2017. The franchise itself cost $100 million and the owners have said they’ll spend at least $150 million to create a new stadium.
So what do these investors expect in return for a quarter of a billion dollars?
The United States, along with a number of countries in Asia, have burgeoning markets for soccer, and while there is heavy competition from Europe for sponsorship dollars (Manchester United, Liverpool, Chelsea, Spurs, Everton, and Roma in particular have made considerable efforts to capture a share of the American market), MLS franchises have steadily risen in value — by more than 175% since 2008, according to Forbes.
This level of investment and the track records of the people involved in LAFC’s ownership group are positive signs for MLS. The league now has even more stakeholders who will help grow and strengthen it’s business — and who ultimately believe that doing so will be good for their own bank accounts.
Follow Jake Cohen on Twitter at @JakeFCohen