Attorney Ben Berger on the “Beckham Bounce”

60 Minutes recently aired a story about the financial impact of David Beckham’s 2007 transfer to the Los Angeles Galaxy of Major League Soccer (MLS).  Despite the less than stellar success of his move to L.A. on the field (the Galaxy missed the 2007 playoffs), the financial triumph of the deal is already apparent.  More than 300,000 Beckham jerseys have been sold nationwide (all sporting the logo of Herbalife, which paid an estimated $25 million for the privilege of sponsoring the Beckham-led Galaxy for five years), making it the highest selling sports jersey in the United States.  Galaxy ticket sales climbed, as did ticket prices, providing a double bounce to the bottom line.  Preseason Galaxy barnstorms to New Zealand, Australia and the Far East added visibility and money to the coffers of AEG (the Galaxy’s primary owner).  

The Beckham Bounce has trickled down throughout the league; ticket sales were up a reported 9% in 2007 and league average attendance hovers around the 17,000 mark.  Two new franchises (at an estimated 30 million dollars in franchise fees each) are entering the league in the next two years and at least half of the teams in the league boast multi-million dollar jersey sponsors that include such prominent corporations as Best Buy, BMO and Glidden.  Most of the teams will have their own stadiums by 2010, thereby shedding franchises of costly rental fees and concession splitting.  League sponsors such as Dick’s Sporting Goods and Adidas are pouring money into the league and for multiple networks (including omnipresent ESPN) are paying MLS for the right to broadcast their games.

Whether these financial advances are attributable to Beckham is questionable (most of the stadiums were in the works before his arrival), yet it is inarguable that his presence has coincided with a stunning influx of cash for a league that had hemorrhaged money during the first decade of its existence.  More MLS teams turned a profit in 2007 then in any previous year, a trend that seems likely to continue.  Nevertheless, player salaries remain low; with team wages capped under $3,000,000 (each team has the right to pay one player outside the cap using the “Beckham Rule”). 

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The League’s growth has provided an array of opportunities for sports legal professionals.  Soccer’s arcane transfer rules and international flavor require diligent and complex player and franchise representation.  Small errors in transfer paperwork regularly torpedo well-publicized transfers and improper Visa applications leave newly signed players unable to compete for their new teams.  The explosion of sponsorship deals, the expansion of soccer related media and the massive amounts of soccer related construction have opened new arenas of soccer/legal partnerships.  Beckham’s impact on the fortunes of the LA Galaxy’s on-field product remain to be seen, but his economic impact throughout MLS is already apparent.

Attorney Ben Berger, an avid fan of soccer and MLS, is an attorney at Updike, Kelly & Spellacy in Hartford, Connecticut.  Ben can be reached at bberger@uks.com or at 860-548-2636.

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