July 13 – Major League Soccer is opening the doors wider for private equity financing to participate in club ownership groups for the first time, according to MLS Commissioner Don Garber.
Speaking to CNBC, Garber said that the decision to allow private equity into club ownership structured was to allow owners to reduce the burden of losses with no match day revenue likely to be generated this season.
While clubs will still receive a share of central marketing revenues from the MLS, the season will be played without fans in their stadia, a major income source for club franchises.
Previously the MLS has been reticent about venture capital coming into the game with Garber frequently having stressed the blue-chip financial strength of the private investors in their ownership groups.
The MLS has tended on the side of owners with strong local links who would likely be investing for the longer term rather than the shorter term objective of private equity. Garber said the feeling had been that the MLS wanted to “know who your owners are so that you understand how long they are for their vision for participating in the league.”
Garber said that the league is “pretty close to finalising something”. For club owners, the opening up of private equity investment will increase the market of buyers, and potentially the value of their club, should they decide to sell.
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