Beckham’s Bucks: A Good Deal For MLS. No, Seriously

By: Laurie | January 23rd, 2007

So when is $250 million actually $2 million?

When you’re talking about David Beckham’s five-year salary. Or at least the part that MLS is on the hook for.

Last week I read a fantastic article about the Beckham deal by Sports Illustrated’s ever-amazing Grant Wahl. (Truly. Whenever I read something he’s written, I feel like I should fall to the ground murmuring, “I am not worthy.”) If you have the time, read the whole article. If not, here’s the Beckham deal in a nutshell:

First off, the actual details are a closely guarded secret. But Beckham’s salary (meaning the dollars forked over by the LA Galaxy) is nowhere close to the media-reported $250 million over five years. It’s probably closer to $50 million, or $10 million a year. (Not pennies, but still small potatoes in the world of professional sports. Particularly if his body holds up for the entire five years.) And he’ll also get some percentage (maybe 40% to 50%) of merchandise revenues, plus a share of ticket revenues. Again, no small sum, but still. It would require a lot of Beckham jerseys to get to $250 million.

But here’s the great part. Thanks to the exclusions and limitations included in the “Beckham Rule,” (aka the designated player rule,) MLS is paying only $400,000 per year for Beckham. That’s it. Anything else, salary-wise, (meaning maybe $48 million) comes from the deep pockets of LA Galaxy owner Phil Anschutz. Who can afford the risk, since he’s currently worth $7.8 billion.

So what does this mean? As I see it, it means that MLS is not bearing the risk if the Beckham gamble doesn’t work out. That risk is borne by Anschutz, and by Beckham (and AEG, Beckham’s management firm.) They’re the ones betting that the financial return they’ll get from bringing Beckham here will be greater than the costs. They’re the ones who stand to lose out if the deal doesn’t live up to all the hype.

Of course, they’re also the ones who will reap the most benefits if all goes according to their plan. But since this is about soccer in the US, which is kind of notoriously fickle and uncertain…

Well, I’m good with that.