D.C. United Valued at More Than $800 Million in Minority Stake Sale
It has been a struggle on the field this season for D.C. United, as the club holds the worst record in MLS with two games left on the schedule. Off the field, the team continues to be a hot ticket.
D.C. United is in the final stages of bringing on several new investors in the club and its related businesses at an enterprise value of slightly more than $800 million, including the team’s roughly $150 million in debt. The new round of investment covers up to 5% of the franchise, according to multiple people familiar with the deal who were granted anonymity because the matter is private. The identities of the investors aren’t known.
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The valuation is believed to be the highest ever for an MLS team selling a minority stake, topping the investments in D.C. United last year by NFL running back Mark Ingram, rapper Yo Gotti, and several others at a $710 million value. In 2020, a handful of LAFC owners bought out the stake owned by Malaysian businessman Vincent Tan at a valuation exceeding $700 million. D.C. United and MLS declined to comment.
MLS valuations have exploded during the past 15 years as expansion fees rose from $10 million to $325 million. Orlando City SC, Houston Dynamo and Real Salt Lake were all sold since May 2021 at a combined $1.2 billion. Limited partnership sales of sports teams have typically come at a discount, but D.C. United and several other MLS clubs have been able to secure valuations on minority stakes that exceed what a control sale would fetch, according to multiple investment bankers. (Sportico will dig deeper into this phenomenon in its 2022 MLS franchise valuations being published Wednesday.)
D.C. United is controlled by Jason Levien and Steve Kaplan, who were previously investors in the Memphis Grizzlies before they bought U.K. soccer club Swansea City. D.C. was valued at roughly $60 million, a then-MLS record, when Levien invested back in 2012. Sportico valued the team at $630 million 14 months ago.
D.C. United has a rich history as one of the original MLS franchises that started play in 1996. It has won four MLS Cups, making it and the LA Galaxy (five wins) the only franchises with more than two titles. But D.C.’s last win was in 2004, and the last decade has produced only one top-three finish in the Eastern Conference.
The team ranks 22nd in average attendance this season, but the new investors are securing more than just a soccer club. The team operates Audi Field, a 20,000-seat, soccer-specific stadium that opened in 2018 in the heart of the city. It has partnered with Hoffman & Associates to develop a mixed-used community outside Audi Field that will include 455 apartment residences, along with retail and entertainment options.
There is a sports betting business in a partnership with FanDuel that includes the first sportsbook at an MLS stadium. D.C. United, with its training facility and academy located in Virginia’s Loudoun County, also holds a sports betting license in that state. The 55-acre Virginia campus hosts games for the NWSL’s Washington Spirit and Old Glory DC of Major League Rugby at Segra Field. The facility has become a hotbed for youth soccer events in northern Virginia.
D.C. United’s new resources are targeted for the real estate development and capital expenditure projects at both Audi Field and Segra Field.
The MLS regular season concludes on Oct. 9.
