Beckham deal starting to pay off for LA Galaxy
WASHINGTON: David Beckham already has brought Major League Soccer's Los Angeles Galaxy an additional $13.3 million in revenue, more than enough to cover his salary for two years.
Beckham, who won't play until July, signed a five-year contract with the Galaxy in January that will pay him an MLS-record base salary of $5.5 million annually and might be worth as much as $250 million with his cut from jersey sales, endorsements and sponsorships.
"We've already made our money back," said Tim Leiweke, 49, chief executive officer of Anschutz Entertainment Group, the Los Angeles-based company that owns the Galaxy. "We were never worried about our financial commitment."
Beckham, who was captain of England's national team for two World Cups, became one of the world's most popular soccer players while competing for Manchester United and Real Madrid. He's married to the former Spice Girl singer Victoria Adams, and they routinely appear in England's press. Last month, his new hairstyle drew coverage.
In the two years after he joined Madrid, its annual sponsorship and advertising income more than doubled to 45.9 million euros ($62.3 million) from contracts with companies including Siemens AG and Adidas AG. Sales of jerseys and other merchandising jumped 62 percent to 54.1 million euros.
Leiweke said Beckham's celebrity has sold an additional 7,000 season tickets. The average price is $700, said Galaxy Assistant General Manager Tom Payne.
That translates into $4.9 million in new revenue. The team doesn't release total season-ticket sales figures.
The club boosted the price of premium seats 48 percent to $4,000 from $2,700 for its 20 home games. It sold 1,000 of them for the season, about a 25 percent increase from 2006, to generate an additional $800,000.
Payne said he expects ticket revenue to double this season to about $10 million.
The team has leased an additional eight corporate suites priced between $67,000 and $150,000 at the Home Depot Center in Carson, California. Only three of 42 suites remain to be rented, Payne said. With an average price of $108,500, that increases revenue by about $868,000.
Sponsors
Herbalife Ltd., a seller of nutritional and weight-loss supplements, signed a five-year, $20 million agreement earlier this month to put its name on the front of the Galaxy's jerseys.
The agreement should help AEG, which is controlled by billionaire entrepreneur Philip Anschutz, triple its sponsorship sales from a year ago to about $10 million, Payne said. New sponsors include Delta Airlines Inc. and AutoTrader.com Inc.
"We got significantly more for the jersey deal with Beckham," Payne said. "He's clearly had an impact on our business."
Beckham's current contract with Madrid expires June 30. He said he'll join the Galaxy, whose season began April 8, in July after a short break.
Adidas's sales of MLS-related products may triple, with half of that from Beckham-related merchandise, said Chris McGuire, 33, vice president of marketing for the US arm of the Herzogenaurach, Germany-based company. He declined to discuss the total sales either before or after the signing.
"Beckham will create a global demand for MLS products, which didn't really exist before," McGuire said.
While MLS and Adidas are predicting Beckham-related sales increases, the 12-year-old league still pales next to its counterparts in U.S. sports, said Matt Powell, an analyst for SportsScanINFO.
MLS licensed product sales in 2006 were $150 million, compared with $400 million for the National Hockey League and $3.5 billion for the National Football League, which earns the most of all the U.S. sports leagues, Powell said.
"$150 million is a non-event; it's walking around money," Powell said. "I'm sure Beckham is going to make a difference, but this gives you a sense of how tiny this business is right now."
The television audience for the Galaxy games probably will rise between 25 percent and 50 percent from the MLS average of 197,000 U.S. households last season, said John Skipper, ESPN's executive vice president of content.
Bloomberg News
(China Daily 04/20/2007 page23)
