If Jan. 12, 2007, was the day that David Beckham put Major League Soccer on the world stage, then February 2009 will be remembered as the month he prepared to exit the stage early.
MLS and the Los Angeles
Galaxy saw Beckham’s
impact on ratings
and attendance.
As of press time, AEG and AC Milan, where Beckham is playing on loan, remained locked in conversations over what the Italian club would have to pay in order to buy Beckham out of the last year of his contract with the Los Angeles Galaxy. But the outcome of those deliberations seems immaterial, considering that Beckham has an option to walk away from his five-year deal with the Galaxy after the 2009 season.
Whenever it happens, Beckham’s departure will come at a price for MLS and the Galaxy.
Beckham has been integral to the business of AEG, the Galaxy and MLS over the last two years. Whether he returns for a third and final season or exits early, his departure will affect everything from attendance and ratings to sponsorship and expansion.
“Everything the league and Galaxy have done has been influenced by (Beckham) at some level,” said John Guppy, founder of Gilt Edge Soccer Marketing and former CEO and president of the Chicago Fire. “David’s not a player, he’s a brand, and losing him would be a business setback.”
Beckham has been a boon to both the Galaxy’s and MLS’s attendance. Galaxy attendance was up 24.9 percent last season, to 26,009, compared with 2006, and MLS average attendance increased 6.9 percent, to 16,459, over the same period.
The Galaxy turned those gains at the gate into profits by increasing average ticket prices from approximately $21.50 before Beckham to $32 afterward. The team created some of the highest-priced season-ticket packages in the league, and in 2007 it cleared a league-high $7,436,529 in full-season-equivalent revenue and accounted for 21 percent of the league’s full-season-equivalent revenue, according to an MLS ticketing report.
| BECKHAM’S IMPACT ON MLS |
 On ESPN2 | | | 2008 cable rating | 2008 viewers | 2007 cable rating | 2007 viewers | | MLS games without Beckham | 0.2 | 241,000 | 0.2 | 248,000 | | MLS games with Beckham | 0.2 | 297,000 | 0.3 | 417,000 | | % difference | 0.00% | 23.20% | 50.00% | 68.10% | |
| At The Gate | | | Galaxy avg. attendance | Galaxy avg. road attendance | MLS avg. attendance | | 2006 | 20,814 | 19,361 | 15,390 | | 2007* | 24,552 | 28,132 | 16,767 | | 2008 | 26,009 | 28,814 | 16,459 | * Beckhams first season with the Galaxy
Source: SBJ/SBD research | |
Other teams benefited, too. The Galaxy drew a record-setting average of 28,814 spectators for its away games in 2008 and helped 11 of the league’s 14 teams attract their largest crowds of the season.
Beckham also provided a major lift to the league’s TV viewership. MLS matches on ESPN2 featuring Beckham averaged 68 percent more viewers than games without him in 2007 and 23 percent more in 2008 (see chart).
The league and team saw sponsorship spending increase following the Beckham signing, with his arrival helping the Galaxy add $6 million in sponsorship revenue in 2007 alone. His departure this year or at the end of the season will affect the terms of the team’s current sponsorships.
If Beckham exits,
sponsor Herbalife’s
deal is subject
to change.
“We have sponsors who came in the year we brought [Beckham] in and there are things we’d need to do for some of them,” said Tom Payne, the Galaxy’s president of business operations. “Our value increased the day we signed him.”
The club’s biggest sponsorship, with jersey partner Herbalife, is among those subject to change if Beckham departs. The multilevel marketing company agreed to a five-year deal for jersey rights worth $4 million to $5 million annually in 2007, and sources familiar with the contract said protections in the contract obligate the Galaxy to have an international star on its roster for the value of the contract to stay the same.
Beckham also helped the league boost its sponsorship revenue, particularly around its Pan Pacific Championships, a tournament that Soccer United Marketing created in 2008. The tournament’s biggest sponsor, MLJ, a Japan-based technology company that distributes digital content for mobile phones and Web sites, signed a seven-figure deal largely because of Beckham’s appeal in Asia. The company designed a special program in which it selected 100 people to watch the first Galaxy match of the tournament live on their cell phones.
Sponsorship wasn’t the only thing Beckham boosted. His arrival contributed to owner-operator Joe Roth’s decision to invest $30 million with partners to launch an expansion team in Seattle.
“The ownership groups clearly appreciated the interest Beckham created but aren’t jumping into the bandwagon because he was here,” said Derek Aframe, vice president of consulting at Octagon and former vice president of the New England Revolution. “It’s about asset appreciation, not immediate payoff.”
MLS’s push last week to have the Beckham dilemma resolved could help the league move forward with plans for life without Beckham. As of last week, the Galaxy’s front office was hoping for the same.
“We need closure,” Payne said. “Our fans need it. Our coach needs it. We all need it.”
