This season, It has been a struggle for on the pitch for D.C. United as the club has the worst record in MLS with two games remaining.
Off the field, the team is still a hot ticket. D.C. United is in the final stages of attracting a number of new investors to the club and related companies, which have an enterprise value of just over $800 million, including the team’s roughly $150 million in debt.
The new investment round is worth up to 5% of the franchise, according to several people familiar with the deal, who spoke on condition of anonymity because the matter is private. The identity of the investors is unknown.
The valuation of an MLS team that sold a minority stake is believed to be the highest ever, surpassing NFL executive Mark Ingram, rapper Yo Got, and several other D.C. players last year. United will receive $710 million for its involvement.
In 2020, a handful of LAFC owners bought a stake owned by Malaysian businessman Vincent Tan for over $700 million. D.C. United and MLS declined to comment.
MLS valuations have exploded over the past 15 years, with expansion fees rising from $10 million to $325 million. Orlando City SC, Houston Dynamo, and Real Salt Lake were all sold for a combined $1.2 billion in May 2021.
According to the investment banker, sales of sports team trusts are generally discounted, but several D.C. United and several other MLS clubs have been able to command valuations for minority interests that exceed the sale of control.
D.C. United is controlled by Jason Levien and Steve Kaplan, who were investors in the Memphis Grizzlies before buying UK soccer club Swansea City. DC was valued at approximately $60 million, a then-MLS record when Levien invested in 2012.
D.C. United has a rich history as one of the original MLS teams that began 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. However, D.C.’s last victory came in 2000, and the Eastern Conference has only had one top-three finish in the last decade.
This season, the team ranks 22nd in terms of average attendance, but new investors are getting more than just a football club. The team operates the 20,000-seat Audi Field soccer stadium, which opened in the heart of the city in 2018. It partnered with Hoffman and Associates to develop a mixed-use community outside Audi Field that will include 455 apartments, retail and entertainment options.
It has a sports betting business in partnership with FanDuel that includes the first MLS stadium sports betting. DC United, which has a training facility and academy in Loudoun County, Virginia, also holds a sports betting license in that state.
The 55-acre Virginia campus hosts NWSL Washington Spirit and Major League Rugby Old Glory DC games at Segra Field. The facility has become the site of youth football events in Northern Virginia.
D.C. United’s new resources will be directed toward real estate development and investment projects at both Audi Field and Segra Field.
The MLS regular season ends on October 9.