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Beckham Deal Pros and Cons
by Ridge Mahoney, March 9th, 2009 4:15PM
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I don't believe the financials, any of them, being bandied about in the wake of David Beckham's extended loan deal. But I never really believed he would, or could, earn $250 million during his original five-year MLS deal, either.

America loves its celebrities, but Becks isn't Oprah, or Bono, or George Clooney, or Kobe Bryant. That's where the real money is.

I'm sure both sides are posturing and spinning as best they can to shine the most flattering light on their half of the stage on which this production has been played, and why not? There's prestige at stake. AEG doesn't want to be seen as kowtowing to another team, and said club, AC Milan, isn't anxious to be seen as a fleeced sheep, either.

What I do believe is that if any sports executive can make the best out of his on-going, very public squabble, it's AEG president Tim Leiweke, who stubbornly got Milan to pay more than it wanted for Beckham, though I heard early in the proceedings it would pay 5 million euros (about $6.5 million), which represents his 2009 salary/guaranteed compensation, and that's the price it is supposedly paying. If Milan started the bidding at $3 million, as Leiweke has claimed, well, that's how negotiations work, right?

Leiweke also tacked on a friendly against the Galaxy (July 19 at Home Depot Center) to a proposed summer tour of two or three games, including a match against rival Inter Milan and perhaps the MLS All-Star Game.

"I have no doubt that Tim will find ways to overcompensate corporate sponsors, advertisers, season-ticket holders, and general fans in a way that will make them comfortable with the future of the LA Galaxy," says Randy Bernstein, who before founding his own marketing company, Premier Partnerships, ran the sponsorship and marketing operations for World Cup USA 1994 and Major League Soccer. Bernstein knows the business, and has known Leiweke for nearly three decades.

"That could mean added value in TV and radio media, hospitality, or brand identification and promotion. Tim will find ways to over-deliver to meet their core objectives."

What all that marketing-speak means is there are ways and means to retain sponsor dollars even if Beckham does depart, since the contracts don't specifically stipulate which player is the "international star" the Galaxy must field to satisfy the contract.

No figures have been revealed, nor is there clarification as to how much, if anything, Beckham will have to pay if he leaves at the end of the MLS season. "Buying out" the remaining two years of his contract would cost between $11 million and $13 million; he supposedly has an opt-out clause, which may or may not include a stipulated figure -- as such clauses often do -- but it's unlikely to involve great sums.

Remember the ballyhooed figure of $250 million that Beckham supposedly could have earned during his five-year stint in MLS through projects and sponsorships and revenue-sharing arrangements? That number doesn't get mentioned at all anymore, since even though he moved a lot of jerseys and put butts in seats upon arriving here in 2007, not much else panned out in terms of saturating the U.S. marketplace with all-Becks, all the time.

Still, he comes back just in time -- assuming he's healthy, of course -- to play against the Red Bulls at the Meadowlands July 16, a match moved up two days to accommodate the Milan-Galaxy friendly, which is another method by which Leiweke can try to boost  sales, especially those of season tickets, in the wake of L'Affair Beckham.

Bernstein admits retaining season-ticket sales will prove tougher than assuaging sponsors and marketing partners.

"The sponsors are a different challenge than season tickets," he says. "When you're dealing with a sponsor base, you're dealing with 15 to 20 companies. Season-ticket holders are thousands of individuals who may be more hard-pressed with their family budget.

"That being said, creating more value is going to be imperative for Tim and the Galaxy and AEG to hold the line on the numbers that they have."

The team is rolling back prices and offering refunds to buyers of season tickets who have already paid up. (They might want to consider lowering the $20 parking fee as well.)

MLS is getting some abuse for allowing a roster and salary-cap exemption for Beckham until he gets here, yet the league did exactly the same thing two years ago when Denilson signed in midseason for FC Dallas. He cost only $200,000 - one-half the salary-cap hit for a Designated Player - and the same is being done for Beckham and the Galaxy. And since he's on loan to a club in foreign country until July, why should an empty uniform take up a roster slot?

AEG, Leiweke and the Galaxy have taken much ridicule for the team's poor performance on the field since Beckham arrived, and this off-field fiasco has further tarnished that image. Media outlets that never paid attention to MLS will probably vanish along with Beckham when he leaves, but critics conveniently forget that all aspects of the soccer world - players, coaches, team executives, journalists, etc. - sat up and took notice, for better or worse, when he came to America. So did the other pro leagues.

"I work with the NBA and the NFL and Major League Baseball and the NHL," says Bernstein, who started the company in 2003 along with former 1994 World Cup chairman and MLS founder Alan Rothenberg. "I work with all leagues and teams and events, and when I talk to them about soccer and they talk about soccer, the first thing they want to talk about are the high-profile steps the sport has taken, and they talk about the Galaxy.  I'm talking about when you think about the sport, you think of a team, and you think of the Galaxy before anybody else.

"The Beckham experiment was just that: an experiment, one that's been successful, and there will be many more to follow."



0 comments

  1. commented on: March 9, 2009 at 4:45 p.m.
    My personal hope is that Beckham's star begins to dim for him personally. I still believe that he has played his LA fans for dupes. He left with a promise to return, and it is difficult for me to believe under any circumstances that he actually intended to return in March. I now believe that he hoped to create the transfer he now as and played his LA fans. As far as I am concerned, "We don't need no stinkin' Beckham." The LA Galaxy performance during his tenure is totally regrettable, and that is deserving of another column. I can understand him wanting to get out from under a team that has not lived up to his presence. But a better athlete would have been candid with his fans. He would have stated his desire to try and make the team in AC Milan--like Donovan did on his departure. Beckham played us for fools. And I am ashamed to watch him succeed in making us LA fans look like fools. I will wince through his final games with us. I only hope that he makes the proper amends to his fans here in Los Angeles. I have yet to see that happen. He is certainly known for being exceedingly self centered. And when his career is over, no team will be around to claim him as a legacy. He will only be a legacy in his own mind. And that is the saddest thing to come from this whole thing. Good with the long ball and dead ball he is. But--great athlete --he is not. He is far too dishonest with his fans.

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