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To understand the marketing and merchandising potential David Beckham brings to the Galaxy and Major League Soccer, consider his first hours with his previous club, Real Madrid.
Grupo Sanitas, a Spanish insurance company, spent $400,000 to sponsor Beckham’s initial physical exam at Real, an event that was televised live by 39 networks worldwide.
In signing the 31-year-old midfielder, the Galaxy and Major League Soccer acquired a global brand that immediately lifts the league’s credibility with Corporate America and its profile around the world.
“They’re not signing him as a soccer player,” said David Carter, a sports marketing professor at USC. “They are signing him as a domestic ambassador of the sport, to be the face of Major League Soccer and help the league instantaneously rebrand itself as a major player on our sports landscape.”
Beckham recently purchased an insurance policy on himself worth $195 million. He might be worth even more to a league that has struggled to attract fans, lucrative television deals and corporate sponsorship on par with other American professional sports.
“No question,” Harvard business professor Stephen Greyser said, “this is a potential plateau jumper for Major League Soccer.”
MLS commissioner Don Garber said he has already been approached by companies looking to purchase the league’s global TV rights. Adidas and another company are in a multimillion-dollar bidding war to have their logo on the front of Galaxy jerseys this season. Americans can soon expect to see Beckham popping up on their TV screens everywhere from late-night talk shows to prime-time commercial spots.
“For Madison Avenue,” Carter said, Beckham “has immense untapped marking value when you combine his celebrity status with brand recognition.”
And soccer is only partially responsible for creating a cultural icon that has long transcended his sport.
“He is a phenomenon,” former U.S. national team star Eric Wynalda said. “How can a guy who is not the greatest player in the world market himself to be the most important soccer player in the world? I don’t know. I don’t care. I’m just glad he’s here.”
How? By marrying a Spice Girl then living a life full of glitz, drama and scandal on the front pages of the Fleet Street tabloids. By being Elvis with a wicked free kick. With ever-changing hairstyles Beckham has turned World Cup matches into fashion statements. In a compelling career in which he has redeemed colossal blunders with dramatic flair, Beckham never possessed the gifts of teammate Ryan Giggs at Manchester United or the brilliance of Zinedine Zidane at Real. Beckham’s true genius is selling Beckham, and few athletes ever have done it better.
“It’s the total brand that gets him all the exposure and notoriety,” Carter said.
Anschutz Entertainment Group CEO Tim Leiweke projects the Beckham brand could bring in a quarter-billion dollars in salary and endorsements over the course of the five-year deal. Carter and others said that figures sounds high. But with Beckham retaining his naming and likeness rights under the deal, it should dwarf the $18.4 million in endorsements he currently receives annually. Beckham’s MLS contract is believed to be worth $10million a season.
Based on Beckham’s track record, the deal should also be lucrative for adidas, the Galaxy and MLS, although Carter said it could be years before Beckham’s impact can be accurately measured.
During Beckham’s career, adidas has posted $20million in sales of a soccer shoe that bears his personal logo.
“If adidas can shave off (U.S.) market share from Nike, that’s worth it in itself,” Carter said.
Real Madrid’s income was $260million in 2002, the year before the club purchased Beckham for $41million from Manchester United. Three years later Real’s annual income reached $515million, nearly half of which came from marketing and merchandising. In winning the 2005 MLS Cup, the Galaxy became the first team in league history to turn a profit, albeit in the $500,000 range.
“We will absolutely market the Galaxy as a world brand,” Leiweke said.
There are already plans for a Galaxy tour of Asia in the spring of 2008. With Beckham headlining, Asian promoters paid Real $6million per match for similar exhibition matches. Real sold 210,000 jerseys during a 17-day tour of Asia shortly after Beckham’s 2003 signing.
Back at home the Galaxy sold 1,000 season tickets Thursday morning alone.
“There’s going to be curiosity factor and that’s wonderful,” Galaxy president Alexi Lalas said.
But Beckham and MLS have to deliver if fans, corporate sponsors and networks are to stay interested after the novelty has worn off. If Beckham is a bust, Harvard’s Greyser said, MLS will have “blown money and an opportunity for credibility.”
“I didn’t want to go out there at 34 years old and for people to turn around and say he’s only going there to get the money,” Beckham said in an interview released by the Galaxy.
But at 31 he is not the player that helped United win six Premier League titles and the 1999 UEFA Champions League. He has started in only five of Real’s 16 league matches this season. In fact, until this week the biggest news Beckham had made this season revolved around his spat with Real’s first-year manager Fabio Capello. Capello refused to let then-injured Beckham attend the Tom Cruise-Katie Holmes wedding.
“Corporate credibility also has to do with backing up notoriety and celebrity with performance,” Greyser said. “When (Beckham) is at his peak he is an energizing performer not just for his teammates but for the fans. If it turns out he’s past his peak, and I stress if, this is going to have a very short life, very short cycle. His visibility and recognizibility are important, but without performance it will be highly transient.”
