The "How Can they Justify Beck's Pay?" thread

Discussion in 'MLS: General' started by golazo68, Jan 10, 2007.

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  1. golazo68

    golazo68 Red Card

    May 21, 2004
    OK, bring out the kitchen sink and let's figure this out.

    For example: How much (more) is a jersey sponsorship worth if MLS has Beckham's games broadcast in Asia?

    Think about how many photos of Beckham will show up around the world in an LA Galaxy kit- with the advertising in full view. How many impressions? That's gotta worth a material amount to some sponser.

    What is the REAL $ value to the Galaxy of selling more kits? How much money goes in their pockets (net) from a $70 jersey sale someplace in Hong Kong?

    Etc.
     
  2. Nico Limmat

    Nico Limmat Member+

    Oct 24, 1999
    Dubai, UAE
    Club:
    Grasshopper Club Zürich
    Nat'l Team:
    Switzerland
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    I think people shouldn't get too excited about jersey sales in Asia...

    Is Al Ittihad going to sell more jerseys because of Figo?

    It's not only the player that appeals to the masses, it's also the club he plays for.
     
  3. chrishungate

    chrishungate Member

    Dec 16, 2005
    Katy, TX
    Club:
    Houston Dynamo
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Seriously, unless you all are a bunch of accountants with actual figures, this thread is pretty irrelevant. All any of us could offer (again, unless we were accountants with actual real world data to support our arguments) would be pure speculation on financial matters and that certainly doesn't deserve its own thread.
     
  4. golazo68

    golazo68 Red Card

    May 21, 2004
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Very few of us are coaches who get to see the players game-in, game-out, yet we hang out here and comment on their abilities as if we 'know'.

    Its the nature of BS. ;)

    Seriously, I think some things can be learned by specifically focusing on the subject. There is some good expertise around here (if they choose to show up)
     
  5. IndividualEleven

    Mar 16, 2006
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread


    Areas of impact worth considering:

    Gate for Home Depot and other stadia that Becks plays in:
    The next television deal:
    Sponsorship deals for the Galaxy:
    Subscriptions to MLS games online:
    'Free advertising' that MLS receives because Becks is playing.
     
  6. Etienne_72772

    Etienne_72772 Member+

    Oct 14, 1999
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Here's my justification: Phil Anschutz thinks it's a good idea. He's a bit better with money than just about anyone I know. Good enough for me!
     
  7. lawrenceterp

    lawrenceterp Moderator
    Staff Member

    Sep 2, 2006
    Virginia
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Not just the gate. Parking and concessions are a huge part of how a team/company makes money from stadium events. Lets say the average person spends 10 bucks on parking and 20 bucks on consessions. That's 30 dollars per person. Say Beckham only brings in an extra 1,000 people per game which is VERY low. That's $30,000 x 30 games....or $900,000 per year for parking and concessions in only MLS games. There are of course US Open Cup games, all-star games, friendlies, possibly MLS-MFL Challenge games, possibly CCC games, etc.... You can see how this adds up pretty quick.
     
  8. Onionsack

    Onionsack BigSoccer Yellow Card

    Jul 21, 2003
    New York City
    Club:
    FC Girondins de Bordeaux
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Gate reciepts, and other stadium revuenes based on attendance increases forecasted (home and away) etc. are MLS revenues. I forget the actual split that MLS has (there used to be a pie chart out there that showed what % was kept by the clubs and what went directly to MLS). In essence a large % of these revenues goes to the league and again to the league when the final accounting is done as the owners share their risk at the end of the season. So all these previous figures DO NOT go directly to LA and AEG. A good portion will be shared by the league.

    AEG will be recovering most of their investment in the form of coporate sponserships and partnerships, merchandise, and exposure. They will also still retain some portion of the shared revenues from raised ticket prices and anciluary revenues after they give some back to MLS.


    What exactly those figures are is anyones guess, but AEG has crunched the numbers and feels its a worthwhile investment, so i am in no position to question it. If this was Steve Ross throwing money around i would raise my brow, but its not, its a incredably sucsessful marketing and enterianment corp that makes these kind of decisions all the time.
     
  9. uclacarlos

    uclacarlos Member+

    Aug 10, 2003
    east coast
    Club:
    FC Barcelona
    Nat'l Team:
    Spain
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    And an critical factor for LA is the higher % of used tickets.

    We all know that LA will announce 23K, and despite having one of the lowest "fudge factor" ratio in the league (according to the SD Tribune article months back), there are simply huge swaths of unused tickets.

    That's lost income. But w/ Becks, that gets handled in one fell swoop.
     
  10. uclacarlos

    uclacarlos Member+

    Aug 10, 2003
    east coast
    Club:
    FC Barcelona
    Nat'l Team:
    Spain
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Many ppl have pointed out Phil's and AEG's net worth, so "$36 mill is a drop in the bucket".

    No, it's not.

    And it's not liquid assets.
     
  11. Flyin Ryan

    Flyin Ryan Member

    May 13, 2004
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Well, he was just given $33 million for D.C. though. The other $3 million can be made up through other sources if the move were made.
     
  12. IASocFan

    IASocFan Moderator
    Staff Member

    Aug 13, 2000
    IOWA
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Let's see:
    How many additional shirts will I buy if Beckham comes to the US? 0 *$75 = 0
    How many additional games will I attend if ...? 0 $50 = 0
    How much additional shirts/games will my friends and their kids and their kids' friends buy/attend? 0

    .............................................. $0

    Seems like an obvious financial decision to me.

    Beckham may bring a few more fans/sales, but not nearly what some might predict.
     
  13. mcontento

    mcontento Member

    Jun 26, 2000
    Catalina Wine Mixer
    Club:
    DC United
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread


    Figo isn't half the marketing machine as Beckham is. In the stores in Bangkok, Singapore and KL I recall from my latest trip seeing a lot of Figo, Beckham, Ronaldo, Totti and Ronaldinho shirts but in people wearing jerseys on the streets it was 2:1 Beckham to everyone else combined.

    Also I think if you want to compare impact in terms of marketability you should compare him to Michael Jordan. You should look at Beckham's total endorsement salary yearly and estimate 5-6 times that is what his marketing value is in total (obviously it would be much less in terms of MLS, but it would still be significant).

    I don't know the answer but the question that needs to be asked is how much of an impact did Jordan have on the Wizards? I'd expect Beckham's would be at least as good for the Galaxy.
     
  14. ATL_Iron

    ATL_Iron New Member

    Jun 19, 2006
    Atlanta
    Club:
    West Ham United FC
    Nat'l Team:
    England
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Lets not forget the reason Beckham is not renewing his contract with Real is because of Image rights.
    So i would be flawed if he signed to the MLS and give them a large share of his image rights. I would hazard a guess that to temp him over they are giving him what he wants and so will not be getting a large share of all these shirt sales and so on.

    I think the MLS (if they do get him) will look at the money as investment to raise the profile and audience of the league in general on a world stage.
     
  15. lawrenceterp

    lawrenceterp Moderator
    Staff Member

    Sep 2, 2006
    Virginia
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    I think the answer here is that all parties will be getting a cut. AEG, MLS, sponsors, networks, Beckham himself, etc.... If any one entity were to lose money it may be AEG, and if they do lose it wont be by that much. They'd make it back long term by having the value of 3 franchises increased because of a more viable league. Beckham of course will make a load, the networks will get increased ratings, the sponsors of course will make money from the advertising, MLS will only be paying $400,000 per year and bringing in a hell of a lot more. I don't see how this is a bad deal for anyone.
     
  16. golazo68

    golazo68 Red Card

    May 21, 2004
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    LOL. Good point.

    So essentially Anschutz sold (traded) DC United for Beckham :D
     
  17. golazo68

    golazo68 Red Card

    May 21, 2004
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    The fact that AEG owns 2 other franchises is significant.

    Let's say they want to sell those during the 'Beckham window'.

    If by signing Beckham, they've raised the value of those franchises by $2m-5m each (and don't laugh- remember, you are going to see increased attendances, sellouts, exposure gains)...

    Then you've just knocked off another $4m-10m off the cost of this deal.
     
  18. crusio

    crusio New Member

    May 10, 2004
    Princeton
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    I don't know how directly comparable Jordan and Beckham are, but this is an interesting question nonetheless.

    Does anyone know the attendance bump had on the Wizards?
     
  19. crusio

    crusio New Member

    May 10, 2004
    Princeton
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    How long do you see these affects lasting?

    A couple months? A season? Indefinately over the 4 years?
     
  20. DGNB

    DGNB New Member

    Jul 28, 2005
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    financially justifying paying beckham 9 million is easy, especially when the rest of the team only costs 2 million per season. And of that 11 million, AEG pays approx. 8 1/2 million of it. It all comes down to sponsorship and ad revenue. I am sure the Galaxy will re-negotiate all their marketing deals, as well as the signage in the stadium and on the jersey. Teams don't make a ton of money in merchandise sales, although it alwasy helps. I am also sure that luxury box proces are going to jump. Trust me, there is no doubt they will make a profit off the attention, even if they shell out 9 million per season.
     
  21. MtMike

    MtMike Member+

    Nov 18, 1999
    the 417
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Yeah, but you live in IOWA.

    (in north Missouri we called that state Idiots Out Wandering Around)

    :D
     
  22. cleazer

    cleazer Member+

    May 6, 2003
    Toledo, OH
    Club:
    Columbus Crew
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Right, and how would you put a price on something like:
    "High school athletes will now know that if they want to make $32 million in this country, there's more than just basketball and baseball. They can make that money playing soccer too."

    That's gotta be worth something. Though how much, you can't really say.
     
  23. eboe

    eboe Member+

    Columbus Crew
    United States
    May 23, 2006
    Columbus, OH
    Club:
    Columbus Crew
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    wow those united fans must feel like shit when they think about the connotations ;)

    of course, the Crew still sucks, so feel free to go ahead and attack us once again because of my joke...
     
  24. eboe

    eboe Member+

    Columbus Crew
    United States
    May 23, 2006
    Columbus, OH
    Club:
    Columbus Crew
    Nat'l Team:
    United States
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    Bad math, or you meant to say AEG pays 8.5 million of it.
     
  25. golazo68

    golazo68 Red Card

    May 21, 2004
    Re: The 'let's financially justify 4 yr/36m for Beckham' thread

    I actually think its permanent. I think MLS is making the right bold move at the right time. I think its a rising tide scenario, and Beckham will jump start all the franchise values again (and start a cycle of better filled stadia/capacity)

    I think (somehow) some of the $9m a year salary will get offloaded to AEG for personal services contract, to make the deal look even better (from an MLS owner perspective).

    Basically in the last 5 years, MLS has up the star power, presentation, facilities while lowering the capacity of the stadiums. Brilliant stuff (scarcity), and I expect we will see some return for that now (and already have- DC United having no suitors years ago, then $25m last summer, and now $33m).

    This is fantastic stuff really. The league almost folded 5 years ago.
     

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