Galaxy sponsorship won’t be affected, Herbalife says of FTC probe
Herbalife Ltd. said Thursday a new U.S. probe of the nutritional products maker would not affect its sponsorship of the Galaxy and other teams and athletes.
The company, whose business practices have been publicly attacked by a Wall Street investment manager, said Wednesday it now was the subject of a civil probe by the Federal Trade Commission but provided no other details.
Money manager Bill Ackman has alleged Herbalife, whose nutrition and weight-management products are sold by independent salespeople, is effectively a pyramid scheme. Herbalife has vehemently denied the allegation.
“The FTC inquiry has no impact on the company’s sponsorships,” Herbalife said in a statement. “We will cooperate fully with the FTC,” the company said, and it reiterated Herbalife was in “compliance with applicable laws and regulations.”
Herbalife has been a primary sponsor of the Galaxy since 2007, when David Beckham joined the Major League Soccer team. The Galaxy declined to reveal other details of the sponsorship.
MLS deferred comment to the Galaxy, which declined to discuss the potential impact of the FTC probe.
The Herbalife name is stitched across the front of the Galaxy’s uniforms and therefore also appears in any Galaxy advertising featuring its players. Herbalife also has advertising signs at the Galaxy’s home venue, the StubHub Center in Carson.
The FTC’s investigation could take months or years to complete.
If the agency did find fault and penalized Herbalife or placed any restrictions on its business practices, those actions would help determine whether Herbalife’s spending on sponsorships was threatened.
In the meantime, the Galaxy finds itself “playing with a brand under fairly visible federal scrutiny and that’s not good marketing,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.
Herbalife also sponsors other teams and athletes, including many foreign teams involved in soccer, hockey, cycling, basketball and swimming. The company also sponsors another star soccer player, Cristiano Ronaldo of Spain’s Real Madrid.
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