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Talking Numbers: What are the Colorado Rapids Worth?

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Have you ever wondered what the Colorado Rapids are worth? Well, today is your lucky day

Ron Chenoy-USA TODAY Sports

The people at Forbes Magazine took a look at the valuation of Major League Soccer teams and to the shock of no one, the Colorado Rapids were dead last in valuation ranking.  Here is the ranking (in millions) of the 18 Major League Soccer teams (Orlando City and New York City FC were not considered as they are expansion teams)

Team Valuation (in Millions)
Seattle Sounders 245
LA Galaxy 240
Houston Dynamo 200
Portland Timbers 185
Toronto FC 175
Sporting Kansas City 165
Chicago Fire 160
New England Revolution 158
FC Dallas 146
San Jose Earthquakes 145
Philadelphia Union 145
New York Red Bulls 144
D.C. United 140
Montreal Impact 128
Vancouver Whitecaps 125
Columbus Crew SC 112
Real Salt Lake 108
Colorado Rapids 105

At least we were over the 100 million mark...

Some other figures that are important that Forbes released: revenue and operating income (or loss).  Again, these figures are in millions:

Team Revenue (in Millions) Operating Income/Loss (in Millions)
Seattle Sounders 50 10
LA Galaxy 44 4
Houston Dynamo 26 5
Portland Timbers 35 4
Toronto FC 32 -7
Sporting Kansas City 29 4
Chicago Fire 21 -6
New England Revolution 25 7
FC Dallas 25 -3
San Jose Earthquakes 13 -1
Philadelphia Union 25 2
New York Red Bulls 22 -9
D.C. United 21 -1
Montreal Impact 22 -3
Vancouver Whitecaps 21 -6
Columbus Crew SC 18 -4
Real Salt Lake 17 1
Colorado Rapids 15 -3

Now, I have a degree in Human Resource Management, but even I know that when your operating income is actually a loss, that is not good.  No one goes into business to lose money and based on these figures, the Rapids are doing just that.

I think it is important to remember that every market is different and what in one city does not necessarily mean it will work in Denver.

How do the Rapids look in 2014 compared to 2012?

This tweet was sent out earlier today by Matthew Tomaszewicz comparing 2012 and 2014 figures:

<blockquote class="twitter-tweet" lang="en"><p lang="en" dir="ltr">Better perhaps to show a parallel of club value to previous? Forbes 2012 vs 2014 MLS club value list (cc <a href="https://twitter.com/AlexiLalas">@AlexiLalas</a>) <a href="http://t.co/66qnGpC9TE">pic.twitter.com/66qnGpC9TE</a></p>&mdash; Matthew Tomaszewicz (@shinguardian) <a href="https://twitter.com/shinguardian/status/634092854290317312">August 19, 2015</a></blockquote>

<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

When I look at these figures the Rapids valuation went from $76 million to $105 million in two years (a 38% increase) while revenue decreased from $18.1 million to $15 million (a 20% decrease) and operating income went from -2.9 million in 2012 to -3 million in 2014.

So the good: the valuation of the franchise.  This confirms the overall trend that MLS franchises are increasing in value.

The Bad: the Rapids revenue and income figures are still some of the worst in the league.  The revenue figure is just abysmal and the fact that they are still losing money is not good.  I have heard a lot of chatter about getting KSE out of the Rapids, but if the Rapids don't start making money, that could happen.  And that is not necessarily a good thing