Signing is a team effort
It took some really big dealers to wrap up the $250-million package that will bring soccer star David Beckham to Los Angeles later this year to play for the Galaxy in Major League Soccer.
Key movers in the deal that began to take shape on New Year’s Day included AEG President Tim Leiweke, “American Idol” creator Simon Fuller, Creative Arts Agency and executives at German shoe giant Adidas. The supporting cast included MLS owners who recently restructured a salary cap and television networks that are paying millions of dollars for the right to broadcast upcoming MLS games.
Beckham’s existing contract with Real Madrid in Spain prohibited him from seeking a new deal until Jan. 1, so that’s when AEG’s chase began in earnest.
“I made some people miserable because we worked on the holiday,” Leiweke said. “And we kept at it until 3 or 4 this morning. There have been a lot of intense conversations.”
Leiweke declined to comment on specifics of the deal that AEG and Beckham’s camp described in a press release as being worth $250 million over five years. But the eye-popping figure isn’t a straight salary deal like the U.S. record for an athlete -- the $252-million, 10-year contract that Alex Rodriguez signed in 2001 with the Texas Rangers.
Beckham’s Galaxy contract is worth about $10 million annually, according to sports, advertising and entertainment industry executives. Beckham, who pitches product for Adidas, Gillette, Motorola and Pepsi-Cola, hopes to earn about $20 million annually from sponsorship deals. Sales of jerseys and other gear could contribute another $10 million, and Beckham reportedly negotiated a profit-sharing plan with the Galaxy and AEG that, depending on the club’s finances, could deliver another $10 million annually.
Though AEG couldn’t approach Beckham until Jan. 1, the Los Angeles-based sports and entertainment company was able to build upon an existing relationship because Beckham earlier had opened a soccer academy at the Home Depot Center in Carson.
AEG’s entertainment division also had done business with 19 Entertainment Inc., a Fuller company that created “American Idol” and had managed the Spice Girls singing group; Beckham’s wife, Victoria, is the former Posh Spice.
Owners of competing MLS franchises also welcomed the news. “You’ve got to give Tim Leiweke all the credit in the world,” said Dave Checketts, whose New York-based SCP Worldwide owns MLS Real Salt Lake. “This took a tremendous amount of vision, energy and work. And it helps to have [AEG owner] Phil Anschutz’s checkbook.”
Leiweke credited CAA partner David “Doc” O’Connor and agent Jeff Frasco for helping to speed the deal along. “Doc, Jeff, Simon and I are all friends,” Leiweke said. “This was a huge deal for AEG.... But, if not for them, this deal couldn’t get done in 10 days.”
Adidas, which outfits MLS teams and Beckham, also was in on the negotiations. The sports marketing giant is betting that the newest MLS star will spark stronger sales in the U.S. AEG also got an assist from other MLS franchise owners who recently agreed to modify a league salary cap so teams could bring in players of Beckham’s caliber.
The deal won immediate approval from U.S. television networks that broadcast professional soccer games. In August, ABC/ESPN and Univision signed an eight-year multimedia deal with MLS. ESPN2 will televise 26 regular-season games and three playoff matches. ABC will televise the MLS title game, the season opener and the All-Star game.
Bob Dorfman, executive creative director with San Francisco-based Pickett Advertising, believes advertisers will consider campaigns featuring Beckham and his wife.
“I can easily see a MasterCard spot featuring the Beckhams shopping for furniture to fill their new Hollywood digs,” Dorfman said.
But it could take a while for Beckham to flex his sports marketing muscles to the degree that he has elsewhere in the world. Though U.S. soccer fans know Beckham, only 40% of Americans in general recognize him, according to Henry Schafer, executive vice president at Manhasset, N.Y.-based Marketing Evaluations Inc., which measures celebrity likability.
At present, Schafer said, Beckham lacks the charismatic appeal in this country that has been reserved for what he called “the creme de la creme of the athletic world, people like Tiger Woods, Michael Jordan and Magic Johnson.”
Beckham will get one early measure of his U.S. commercial appeal in July when his contract with Gillette expires.
“We’re going to evaluate the opportunities that this move has for our relationship,” Gillette spokesman Mike Norton said. “But David has been the public face for Gillette’s male grooming products since we signed him in 2004, and he’s been seen in more than 150 countries.”
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Times staff writer Larry Stewart contributed to this report.
