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$250m for brand Beckham
12/01/2007 09:28 - (SA)
New York - David Beckham will reportedly
earn $250m in a five-year deal to play soccer in the
United States - but at least 80% of that money has
nothing to do with kicking a ball for the Los Angeles Galaxy.
Although Beckham, who will start with the Galaxy after his
Real Madrid contract expires on June 30, will become the
highest paid player for Major League Soccer (MLS) in the United
States, MLS sources say his annual playing income is only in
the "single figure millions."
With Beckham getting paid up to $50 million over five years
for playing soccer, where does the rest of the money come
from?
"Most of the value is from David's worldwide endorsement,"
MLS Deputy Commissioner Ivan Gazidis said on Thursday. "That's
a separate deal. That's his deal with CAA (Creative Artists
Agency) and 19 Entertainment. That's not something we're
involved in.
"Obviously I think the feeling is that coming to the United
States boosts the value of (the Beckham) brand and the revenues
that can be generated from it, but that's not our business," he
said. "It wasn't part of our contract discussions at all."
Beckham's playing contract falls well short of the big
deals signed in Major League Baseball, where Alex Rodriguez is
being paid $252m and Derek Jeter $189m, both over
10 years.
Scott Branvold, a professor in sports management at Robert
Morris University in Pittsburgh, said the Beckham brand -
which includes the soccer player's wife, former Spice Girl pop
star Victoria Beckham - goes well beyond the game of soccer.
But he questioned whether Beckham truly could earn $200m over five years through sponsorship and other business deals.
"Soccer has struggled so much in the United States that you
certainly have to wonder whether there is any realistic
possibility. Maybe he will do a reality show," he said.
"The fact that I would recognise who he is, and he hasn't
really played in the United States, probably is commentary to
the fact that his name is probably somewhat bigger than soccer
itself," said Branvold.
Sponsorship deals
Beckham earns about $7.7m a year from Real Madrid
and an estimated $30m more from sponsorship deals with
names such as Adidas, Gillette, Motorola and Pepsi, although 50% of his image rights go to the Spanish club.
"There are a lot of commercial elements in our deal with
him - the sale of jerseys and those types of things - but
when you are talking about the Beckham brand, where most of his
revenue earning opportunities are, it's independent of the
league," Gazidis said.
The 13 teams in Major League Soccer have an annual salary
cap of $2.1m for a roster of 18 players. But a new
"designated player rule" - dubbed the "Beckham rule" - allows
teams to pay above the salary cap for one player.
"We had a league in the late '70s and early '80s, the North
American Soccer League, which went out of business because of
uncontrolled spending by owners. This is not uncontrolled
spending," said Gazidis, who handles player signings.
He said the league feels now is the right time to
"strategically invest" in a name player and Beckham's presence
would deliver value to MLS broadcast partners and sponsors and
help drive up team values.
"But more importantly than all of that, he is a figure that
has the ability to give soccer more cultural relevance in this
country, and that's really what's driving this from our
standpoint," Gazidis said.
More than 1 000 new season tickets were sold by the Galaxy
on Thursday morning after news of the Beckham deal, while
Toronto FC - which will debut in the MLS this year - sold 100
season tickets.
- Reuters
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