The San Jose Earthquakes are a professional soccer club based in San Jose, California. They compete in Major League Soccer (MLS) as a member of the Western Conference. As one of the ten charter clubs of MLS, the Earthquakes have a long and storied history dating back to the league’s inception in 1996.
What is the current value of the San Jose Earthquakes?
According to Forbes’ most recent valuations of MLS teams, the San Jose Earthquakes are worth $335 million as of 2022. This ranks them 16th out of the league’s 28 teams in terms of overall value. The Earthquakes’ value has increased steadily in recent years, up from $230 million in 2019 and $285 million in 2021.
The leading factors driving the team’s growing value include:
- Increasing league revenue – MLS signed a 5-year media rights deal in 2022 worth a minimum of $250 million per season.
- New stadium – The Earthquakes moved into their privately financed Avaya Stadium in 2015.
- Strong local support – Despite on-field struggles, Earthquakes home attendance ranks in the top half of MLS.
The Earthquakes are owned by Earthquakes Soccer LLC, an investment group led by majority owner John Fisher. Fisher and his group acquired the team in 2007 and have invested significantly in infrastructure like the new $100 million stadium.
How much did the San Jose Earthquakes sell for in their last sale?
The San Jose Earthquakes were last sold in 2007 when the current ownership group, Earthquakes Soccer LLC, acquired the team for around $20 million according to reports at the time.
The key details of the 2007 sale:
- Sold by AEG to Earthquakes Soccer LLC
- Led by majority investor John Fisher
- Reported sale price of $20-25 million
- Included rights to team name and records
AEG had run the Earthquakes from 2001-2005 before putting the team on hiatus in 2006 when they could not secure a stadium plan in San Jose. After being inactive for two seasons, MLS worked to find new local ownership to revive the team in San Jose, culminating in the sale to the Fisher group.
The reported $20-25 million sale price in 2007 demonstrates significant appreciation as the team is now valued 17-18 times higher at $335 million just 15 years later.
What is the revenue of the San Jose Earthquakes?
As a private company, the San Jose Earthquakes do not publicly disclose their financial results or revenue figures. However, some estimates are available based on league financial reports.
For the 2019 season, Forbes estimated the Earthquakes generated around $32 million in annual revenue. This ranked 21st in MLS for that season.
The major revenue streams for MLS clubs like the Earthquakes include:
- Ticketing – Matchday ticket sales and premium seating
- Sponsorships – Stadium naming rights and jersey sponsors
- Media – Local and national TV/radio deals and digital streaming
- Merchandise – Team gear and apparel
- Other – Concessions, events, licensing, investments
The Earthquakes’ revenue is likely to have grown over the past 3 seasons based on the team’s new stadium and improved on-field performance making the playoffs in 2020. Conservative estimates would put their current annual revenue between $35-40 million.
San Jose Earthquakes Estimated Revenue Growth
Year | Estimated Revenue |
---|---|
2019 | $32 million |
2020 | $34 million |
2021 | $36 million |
2022 | $38 million |
What is the player salary budget for the San Jose Earthquakes?
Like all MLS clubs, the San Jose Earthquakes have a salary budget that dictates how much they can spend on player compensation. This salary budget is primarily funded by the league and represents the major cost for teams.
For the 2022 MLS season, the Earthquakes have a base salary budget of $12,491,250 based on figures released by the MLS Players Association.
In addition to the base budget, MLS teams have some flexibility to spend above the limit using various mechanisms like General Allocation Money (GAM). The total on-budget spending estimated for San Jose in 2022 is around $14 million.
Here is a breakdown of the Earthquakes’ 2022 salary spending:
- Base salary budget: $12,491,250 million
- Estimated GAM/Discretionary spending: $1.5 million
- Total estimated on-budget spending: $14 million
The Earthquakes roster currently includes 26 players accounting for the estimated $14 million in salary spending for 2022. This averages around $538,000 spent per player.
San Jose’s salary budget ranks in the bottom half of MLS, reflecting that while off-field valuations have risen, the Earthquakes still have work to do to translate that into increased spending on players compared to the big budget powerhouses like LA Galaxy and Seattle Sounders.
How much do San Jose Earthquakes players get paid?
The San Jose Earthquakes have one of the lower total team payrolls in Major League Soccer. As a result, most Earthquakes players earn salaries in the low to mid six-figures.
Based on the 2022 salary budget outlined above, here is an overview of Earthquakes player salaries:
- Highest paid player: Forward Jeremy Ebobisse – $1.267 million
- Team captain: Midfielder Jackson Yueill – $825,000
- Average salary: Around $538,000
- League minimum salary: $65,500 for senior minimum players
A few other notable 2022 salaries on the Earthquakes include:
- Midfielder Jamiro Monteiro – $1.068 million
- Defender Paul Marie – $934,000
- Goalkeeper JT Marcinkowski – $482,500
The Earthquakes do have flexibility to sign up to three Designated Players with salaries above the budget cap. Currently midfielder Carlos Fierro is the lone DP at $1.05 million.
While San Jose player salaries are low relative to leading MLS clubs like LA Galaxy ($21 million payroll), their compensation is on par with the league median payroll around $12 million.
How does the San Jose Earthquakes’ valuation and spending compare to other MLS teams?
The San Jose Earthquakes rank in the bottom half of MLS teams based on financial metrics like valuation, revenue, and player spending.
Here is a comparison of the Earthquakes versus selected top MLS teams:
Team | Valuation | Estimated Revenue | Total Payroll |
---|---|---|---|
LA Galaxy | $725 million | $63 million | $21 million |
Seattle Sounders | $405 million | $50 million | $19 million |
San Jose Earthquakes | $335 million | $38 million | $14 million |
While the Earthquakes lag behind MLS elite clubs, their valuation and revenue are on par with mid-tier teams like Real Salt Lake and CF Montreal. Player spending correlates closely with on-field success, suggesting San Jose still has significant room to grow into one of MLS’ top franchises.
The Earthquakes are positioned well for the future with their improved stadium and training facilities and the Bay Area’s soccer passion. Increased investment in the coming years could see San Jose emerge as a power player in MLS.
What is the potential for future growth in value and spending for the San Jose Earthquakes?
Despite currently lagging behind MLS elite clubs, there remains strong potential for the San Jose Earthquakes to substantially grow their value, revenue, and spending in the coming years.
Driving the Earthquakes’ growth potential is the dynamic Bay Area market featuring a strong corporate base and demographics favoring soccer. San Jose is now well-positioned off the field with their new Avaya Stadium and training center.
If the Earthquakes can capitalize on their market and facilities with on-field success, they could quicklyadd 20-30% in valuation to reach upwards of $400 million. Related revenue could reach $45-50 million annually based on additional corporate partnerships and ticket sales.
This revenue growth would support increased investment in the technical side. The Earthquakes have room under the current salary budget structure to add 2-3 more impact Designated Players in the $1-2 million range.
Within 5 years, it’s realistic for the Earthquakes to be operating with a team payroll in the $20-25 million range, putting them on par with the top third of MLS clubs.
Ultimately, ownership has shown a willingness to invest, the market possesses the attributes to support growth, and MLS as a whole continues to thrive. The Earthquakes have all the ingredients for bullish future prospects if the on-field product and wins materialize.
Conclusion
In summary, while the San Jose Earthquakes currently rank in the bottom half of MLS clubs in valuation and spending, there is ample room for growth in the coming years. The Earthquakes have a strong ownership group, reside in a top MLS market, and now have the facilities to match their ambition. Combined with the soaring growth trajectory of MLS, San Jose is well-positioned for their valuation, revenue, and player investment to start catching up with the league’s elite teams. The next 5-10 years should see the Earthquakes enhance their competitiveness and emerge as one of the top franchises in Major League Soccer.