One year ago, David Beckham’s arrival in Los Angeles was greeted by media coverage so over-the-top it bred a backlash from skeptics who doubted his worth to U.S. soccer.
But now the numbers are in, and it appears the club’s investment is paying off – even as the frenzy over the aging British soccer star’s arrival has faded.
The Galaxy are drawing an average of 25,142 fans to each home game this year at the Home Depot Center in Carson. That doesn’t match the 27,000-fan sellouts every game after Beckham arrived last year, but it still leads Major League Soccer. And it’s a 20 percent increase over the club’s average attendance in 2006.
Moreover, Beckham is even a greater draw outside Los Angeles, helping the Galaxy sell out three of their six away games. That has pushed their average MLS attendance on the road to 27,092, including nearly 36,000 fans who attended a June 19 game against D.C. United in Washington.
“What Beckham has been able to do is bring a non-core soccer demographic into the mix to build the soccer brand here in the United States,” said Jeff Marks, chief operating officer for Premier Partnerships, a sports marketing consultancy.
What exactly the Galaxy is paying Beckham has been all over the map in published reports, but it appears he makes about $6.5 million as an annual guaranteed salary. With incentives, endorsements and other revenue streams it’s possible his income could approach the widely quoted $250 million figure over the five-year term of his contract, though it’s unclear.
Indeed, the Galaxy are attempting to maximize both his value to the team and the league beyond simply promoting home and away-game sales.
(The MLS is a single limited liability company, with club operators each holding a stake. The Galaxy and Houston Dynamo are both owned by Anschutz Entertainment Group, a Los Angeles-based company that is part of Denver billionaire Philip Anschutz’s investment company.)
One of the most lucrative plans calls for the Galaxy to schedule more exhibition games on other continents, where soccer is often the No. 1 sport. Last year, the Galaxy scheduled a post-season tour for the first time in its history and continued playing international matches before the 2008 season got under way.
Top overseas teams such as Manchester United and Real Madrid can make more than $1 million in appearance fees in a single “friendly” international match. The Galaxy hasn’t disclosed what it has made on its matches, but despite the high traveling expenses, they are profitable.
More importantly, they present an opportunity to extend the Galaxy’s name at a time when there is interest in the team. Last year, the team drew more than 80,000 to an exhibition match in Sydney, Australia. This year the team is trying to schedule off-season trips to the Middle East and Asia.
“Touring the team is a big part of our business plan. Being relevant internationally opens up many opportunities for our organization,” said Galaxy General Manager Alexi Lalas. “From a business perspective, we are looking to maximize Beckham and his time with the Galaxy, but the real measure will be to look at the positive impact on our brand after he’s gone.”
Sponsorship bonanza
The team also reports it has benefited from the rising value of its sponsorships, though it won’t disclose numbers.
However, its chief sponsor, Herbalife Ltd., said that the foreign matches are a bonanza, increasing its name recognition in countries where soccer is a national obsession. The Los Angeles nutritional supplement company has paid to put its name on the front of the Galaxy’s uniforms.
“It’s tremendously powerful to leverage the alliance, especially when the team is traveling,” said Tom Zimmer, senior vice president of Herbalife, which has seen much of its growth come from overseas in recent years.
After the Galaxy toured Korea last year, a Herbalife distributor called the company’s headquarters to say that more potential customers now recognized the Herbalife brand, he said.
For the league, Beckham’s arrival also has had an immediate effect, raising general interest in Major League Soccer, at least if TV ratings are any measure.
In 2007, games on cable networks ESPN/ESPN2 with Beckham drew 150 percent more household viewers than matches without Beckham, according to the Galaxy. (The league signed its contract with ESPN and three other networks in 2006 before Beckham came to the Galaxy.)
And the league has moved into expansion mode since Beckham’s arrival. Within the past 12 months, it has announced it will add teams in Seattle and Philadelphia for the 2009 and 2010 seasons, respectively. (Before playing a single game, the Seattle franchise, owned by Microsoft billionaire Paul Allen, has already sold 17,000 season tickets. Philadelphia has sold 5,000 season tickets before even choosing a team name.)
“To establish a greater national footprint, we need to expand,” said Dan Courtemanche, Major League Soccer’s senior vice president for marketing.
Moreover, those franchises are much more valuable. Expansion fees for Seattle and Philadelphia cost $30 million each. They were previously $20 million and the league may bump that fee up to $40 million or more for future franchises.
By 2012, the league plans to add two franchises to bring its total to 18 teams and the league’s board will discuss plans to add the 19th and 20th teams at its next meeting, July 24.
Then, there are the jerseys.
The Galaxy claim to have sold 300,000 of their distinctive white and blue jerseys printed with Beckham’s name since his arrival. And across the league jersey sales were up 780 percent in 2007.
More importantly for the league, the teams are finding more sponsors willing to pay the seven figures to get their names on jerseys, similar to what Herbalife has with the Galaxy.
“Jersey naming deals are at record levels for MLS,” said Marks. “You can’t even find (Beckham’s) jerseys in kids’ sizes.”
