SBJ/March 26 - April 1, 2007/This Weeks News

Galaxy’s new Herbalife deal raises bar for jersey sponsors

The Galaxy got a lot richer last week.

Herbalife will be prominent on the new-
look Galaxy jerseys.

Herbalife Ltd. reached an agreement with Anschutz Entertainment Group to have its logo on the front of the Los Angeles Galaxy’s jersey in a deal that sources put between $4 million and $5 million annually for five years.

The figures are well above the reported $1 million that XanGo spent on Real Salt Lake’s jersey but beneath the $20 million-plus that the biggest European teams command for their jerseys (see chart).

Though he declined to discuss terms of the deal, AEG Sports President Shawn Hunter said it was the equivalent of one of the biggest naming-rights deals in the country.

“This clearly sets a benchmark in MLS that other teams can shoot for,” Hunter added.

The agreement gives Herbalife, a global, direct-sales company that specializes in weight-management and nutritional supplements products, rights to what many consider the world’s top-selling jersey: David Beckham’s No. 23.

When the English soccer star, who will join the Galaxy in July, left Manchester United four years ago for Real Madrid, the club’s jersey sales reportedly rose from 900,000 per year to more than 3 million.

“When he goes to a press conference and throws on a Galaxy jersey and that Herbalife jersey, it will be on the front page of every sports section in the world,” Hunter said. “That can’t be quantified.”

Soccer jersey deals
Sponsor
Team
Reported annual value
Tamoil Juventus
$30 million
BenQ-Siemens Real Madrid
$28 million
AIG Manchester United
$26 million
Samsung Chelsea
$20 million
Herbalife L.A. Galaxy
$4 million-$5 million
XanGo Real Salt Lake
$1 million
 
Source: SportsBusiness Journal/SportsBusiness Daily archives

While he expects those types of impressions to be immeasurable, Herbalife CEO Michael Johnson said Beckham was only part of the attraction. The company began negotiating with AEG in December, nearly six months after MLS decided teams could sell jersey sponsorships and a month before Beckham signed with the team.

Following the Beckham announcement, five other interested parties approached AEG, Hunter said, but in the end, the company felt Herbalife was the best partner.

As part of the agreement, Herbalife will extend its sponsorship of AEG’s Amgen Tour of California, the JPMorgan Chase Open tennis tournament, the Los Angeles Riptide of Major League Lacrosse and the Home Depot Center.

Herbalife will be fully integrated into AEG’s stadium, media and grassroots programs. It also has been introduced to Creative Artists Agency, which represents Beckham, and is discussing the possibility of having him endorse a children’s line of products due out later this year.

Herbalife, which has 42 stores in China, also was attracted by AEG’s plan for an international tour next fall in Asia, where Beckham is very popular.

“We looked at this as a global opportunity,” Johnson said. “Soccer’s big in the U.S., but it’s enormous outside the U.S., and that’s where we do most of our business.”

The Galaxy is in the process of redesigning their jersey. A new jersey featuring the Herbalife logo and different colors is due to appear in mid-July.


Los Angeles Galaxy Sponsors

AAA
Adidas
ADT Security Services
American Express
Athletes Performance
AutoTrader.com*
AT&T
Centinela Freeman Regional Medical Center
CornNuts (Kraft)*
Delta*
Gold-n-Soft Margarine
Herbalife*
Hilton Torrance/South Bay
The Home Depot
Honda

Hormel Foods
Glidden (ICI Paints)*
Infinity Insurance
Kawesch Laser*
Kragen Auto Parts
La Curacao
Macy’s
Makita*
Mission Foods*
Deportes Prieto
Quinn
Sports Profiles Plus
Staples
Tide
Time Warner Cable
Verizon Wireless

* New or expanded deals since signing David Beckham.
Source: Los Angeles Galaxy

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