Beckham In America: Sponsors Contribute To $250M Deal

Fuller (l) And Leiweke (c) “Major Movers” In Beckham’s Deal With Galaxy

David Beckham’s five-year, $250M deal to play in MLS is worth about $10M annually from the Galaxy, with about $20M coming from sponsorship deals and possibly another $10M from merchandise sales, as well as “a profit-sharing plan with the Galaxy and AEG that, depending on the club’s finances, could deliver another” $10M annually, according to sources cited by Greg Johnson of the L.A. TIMES. The “key movers in the deal” included AEG President & CEO Tim Leiweke, whose company owns the Galaxy; Simon Fuller’s 19 Entertainment, which manages Beckham; CAA, which reps him; and adidas execs. The “supporting cast included MLS owners who recently restructured a salary cap” and TV networks paying rights fees to broadcast MLS games. AEG was “able to build on an existing relationship” with Beckham, who jointly operates a soccer academy with the company at The Home Depot Center, home of the Galaxy (L.A. TIMES, 1/12).

A LOOK INSIDE THE CONTRACT: British media reports said Beckham will “retain 100[%] of his image rights valued by some at $40[M] per year” (SAN DIEGO UNION-TRIBUNE, 1/12). Leiweke: “Most of [the $250M] will be from commercials and the endorsement side. That’s not the Galaxy paying that” (PRESS-ENTERPRISE, 1/12). ESPN’s Peter Gammons reported the deal guarantees Beckham $11M in year one, $10.5M in years two and three and $9.5M in years four and five (ESPN.com, 1/11). In DC, Steven Goff reports the agreement will also “compensate him through league initiatives after his playing career is over” (WASHINGTON POST, 1/12).

Gillette Still Formulating Beckham Activation Plans

ENDORSEMENT OPPORTUNITIES: Beckham’s endorsement portfolio, which includes deals with Pepsi, Gillette, Motorola and adidas, “is worth $20[M] a year, although this is expected to rise to about $25[M] annually when he moves to the U.S.” (FINANCIAL TIMES, 1/12). Pepsi and Gillette execs reached by THE DAILY did not discuss specific activation plans around Beckham in the U.S. PepsiCo N.A. VP/Sports Marketing & Media Ralph Santana said, "As founding partners of the league, we have watched the sport grow each year and the addition of a world-class athlete like David Beckham illustrates just how far the MLS has come in a short time. ... He's going to bring incredible attention to not only the league but to the sport of soccer in this country.” Gillette spokesperson Mike Norton said that the company’s plans around Beckham in the U.S. are still being formulated. Norton: “For Gillette, David’s profile is certainly going to be raised in the U.S. ... The fact that more people will have an understanding of who he is on and off the soccer field is going to be terrific.” Rule 1.02 Marketing Founder Eric Bechtel, on sponsors activating around Beckham in the U.S.: “With all the media attention he'll receive here from the league and ESPN, I'd be shocked if they didn't take advantage of it in the U.S. too” (THE DAILY).

MARKETABILITY: Beckham is the best-known active soccer player in the U.S., according to The Marketing Arm’s Davie Brown Index. He ranks second only to former women’s star Mia Hamm among all soccer players. He ranks No. 99 among 350 celebrity-athletes, ahead of Nuggets G Allen Iverson, Yankees 3B Alex Rodriguez and Falcons QB Michael Vick. Real Salt Lake F Freddy Adu ranks No. 284 (The Marketing Arm). Octagon Consulting VP Derek Aframe estimated Beckham is among the top ten most-marketable athletes in the U.S. and said, “You really have the convergence of entertainment and sports on a global basis in a guy like David Beckham.” Pickett Advertising Exec Creative Dir Bob Dorfman: “He could work for an American fashion icon like Levi’s, a financial services company like American Express, a big-box retailer like Target, any fast-food or snack food maker, or most any American car company” (THE DAILY).

HOME DEPOT: The Bonham Group Chair & CEO Dean Bonham, on how The Home Depot could benefit as the Galaxy’s stadium naming-rights partner: “With anticipated home attendance increases and dramatic spikes in TV broadcasts, ratings and media coverage (foreign and domestic), the value of Home Depot’s naming rights will improve exponentially as a result of the Beckham signing” (THE DAILY).

ADD SOME SPICE: Beckham has said that he “would like to pursue a career in film and has made several movie cameos,” and by playing in MLS, which has a TV rights deal with ESPN/ABC, “he will have a naturally close relationship with Disney” (DAILY VARIETY, 1/12). The WALL STREET JOURNAL’s Patrick, Weinbach & Johnson write Beckham’s wife, Victoria, “is just as important a part of the marketing package.” In Touch magazine Exec Editor Michelle Lee: “I imagine our coverage of Posh is definitely going to increase” (WALL STREET JOURNAL, 1/12). In L.A., Abcarian, Martelle & Murphy write that with the Beckhams’ presence in the city, British tabloids “are gearing up to spend a fortune” with photo agencies such as X17, “and some are even considering sending correspondents” to L.A. (L.A. TIMES, 1/12).

NET MINDER: Within an “hour of the official announcement” of Beckham’s signing, “at least seven website domains” relating to the Galaxy and Beckham were claimed by U.S. and U.K. residents, including lagalaxy.org, lagalaxy.co.uk, lagalaxy.info, beckhamgalaxy.net, beckhamgalaxy.com, beckhamgalaxy.info and davidbeckhamgalaxy.com. The latter was “turned into a fan” site, while the others “only contain football related advertising and pay-per-click sponsored links.” NetNames COO Jonathan Robinson: “This is some of the fastest cybersquatting I have ever seen” (MEDIAGUARDIAN.co.uk, 1/12).