Player signs five-year deal with franchise
Soccer star David Beckham is going Hollywood.
Beckham, 31, has signed a five-year deal worth close to $250 million in salary and sponsorships to leave Spanish powerhouse Real Madrid at the end of its current season and move to the Los Angeles Galaxy in August.
Pact makes him the highest-profile soccer player to come to the U.S. since Pele joined the New York Cosmos in 1975.
Deal reps an enormous investment by Anschutz Entertainment Group, which owns the Galaxy; its home field, the Home Depot Center; and three other Major League Soccer teams.
“David Beckham will have a greater impact on soccer in America than any athlete has ever had on a sport globally,” declared Timothy J. Leiweke, prexy-CEO of Anschutz Entertainment.
Hollywood-style deal was brokered by Beckham’s manager and “American Idol” impresario Simon Fuller and CAA Sports. Profit participation with the team and multiple corporate sponsorships will amount to $50 million a year.
For playing professional soccer, Beckham will be paid an annual salary of $10 million, about what he makes as a bench player with Real Madrid. A $10 million merchandising deal will primarily involve the sale of shirts, while participation in the Galaxy’s profits is estimated at $10 million as well.
But about half of Beckham’s salary will come from corporations that pay him as a pitchman, including new and continuing deals with Motorola, VW, PepsiCo, Adidas and Gillette worth $20 million-$25 million a year.
His soccer salary is not guaranteed, but Beckham recently took out an insurance policy, believed to be the biggest in sports, that would guarantee his salary if he’s injured.
Beckham has said he would like to pursue a career in film and has made several movie cameos, including in “Goal! 2.” By playing in Major League Soccer, he will have a naturally close relationship with Disney, which, through ABC Sports and ESPN, has a broadcast deal for MLS games through 2014.
Both nets are tearing up their schedules for the second half of the MLS season to take advantage of Beckham’s star power.
“We will be looking to maximize it,” said ESPN veep Scott Guglielmino. “I wouldn’t be surprised if there’s a ‘SportsCenter’ commercial in his future.”
Also likely to benefit is News Corp.’s Fox Soccer Channel, which broadcasts one exclusive game per week on Saturday nights. Web has distribution in 28 million homes, all digital cable or satellite subscribers.
“I think this is a huge step for the MLS and soccer generally,” said FSC general manager David Sternberg. “The league has made a significant commitment to upgrading the product on the field.”
Beckham will relocate to the L.A. area with wife Victoria Beckham, the former Posh Spice, providing another celebrity marriage to be endlessly parsed by celebrity weeklies and magazine shows.
The pair has cultivated a friendship of mutual benefit with Tom Cruise and Katie Holmes as part of a careful attempt to build their profile Stateside. But it’s unclear if the U.S. celebrity-industrial complex is buying.
“I feel there is a disconnect between them and the American audience,” said US Weekly editor Janice Min. “He is almost inconceivably good-looking, but their superstardom in the U.S. has yet to be proven.”
Beckham’s off-the-field marketing prowess was a big part of his value to Real Madrid, the club that signed him after he had become a star with Manchester United in England. His signing, in 2003 for $41 million, quickly made Real Madrid the most valuable soccer club in the world, driven by lucrative merchandising and TV deals.
AEG will be banking on Beckham’s continued marketing prowess in the waning years of his career in a culture that is not obsessed with soccer but is obsessed with celebrity.
“If you talk about investing a quarter billion dollars into a single athlete, you had better hope he delivers on a variety of fronts,” said David Carter, director of USC’s Sports Business Institute.