Leiweke: "Galaxy could be at $100m (a year?) revenues within a couple years".

I would just say that many MLS fans, burned by years of half-empty stadiums and not-so-inspiring soccer, have yet to grasp what could be coming.

Galaxy brand on the move worldwide:
https://www.bigsoccer.com/forum/showthread.php?t=538012

Beckham/Galaxy hype machine already rolling:
http://www.latimes.com/sports/socce...?coll=la-headlines-sports-&ctrack=2&cset=true


Listen I'm not even a Galaxy fan, but I would encourage all of you to free your minds and envision the future.
If you don't believe Galaxy will be striking deals for McBeckham Happy Meals and Beckham soccer jerseys and T-shirts for sale at every Wal-Mart then you haven't been paying attention.

 

Actually it would be the Burger King equivalent, MLS & Burger King partnered up last year IIRC.

 

Yes, we know MLS will market Becks. That's not the question.

The only question is whether that marketing could possibly net the Galaxy an additional $50m in revenue.

In answering this question, please consider how much other teams have been able to get off of Becks. And consider that Becks' "value" in 2004 when he transferred to REal Madrid was about US$50m. That value consists of both commercial and on-field components. Also keep in mind that an asset's value will typically be several times the amount of revenue it generates in any given year.

When you consider all of that, it's tough to see how Becks, worth only $50m at his prime to a club that was well-positioned to exploit him as an asset, could generate $50m in one year here for a club with a smaller platform.

Your answer seems to be "yes, but we'll market!" Of course. But I don't think you're appreciating how tough it is to make $50m or $100m.

 

I'm sure they'll try some of these things. The question is how successful these campaigns will be, and whether or not they will be sustainable for any significant length of time. I'm not saying they won't be successful or sustainable. I don't know, but I'm skeptical. And I'm wary of comparisons to Pele.

 

I'm not sure there's any way to know the context, but you're asking for trouble when you phrase yourself that way. I don't know the context when Phil Woosnam said it 35 years ago. . . what I do know is it's no great surprise those statements stick around.

Besides, the Kings did 82 Million in revenue this past year (http://www.forbes.com/lists/2006/31/biz_06nhl_Los-Angeles-Kings_311627.html). The Gals would be under the gun to hit that target as well. And since the Kings are also an AEG product, I'm not sure beating them should be the Gals' goal.

I'm not going to disagree that he's made some good (and gutsy) business calls. I certainly hope that the Gals leave all legitimately important decisions to him and not Lalas. I'm just saying his mouth can write a pretty big check every so often. Personally, I'd put the odds against him hitting his target at 4 or 5 to 1. Not impossible, but even with what we know about the Beckham effect, it's still an underdog.

 

You think Asian fans (or any non-MLS fans for that matter) give a damn where the Galaxy finish in the MLS standings?

All they want to see is Beckham and his merry band of travelers.

 

Stan, I've found very little to disagree with you about across all threads in my time here, but I think you are wrong on this part.

I think AEG is looking at Beckham as a global phenominon to which they can pin the Galaxy.
Football (futbol, soccer) is THE global sport.
By comparison few people on this planet give a crap about ice hockey -- and I say this as a son of a Canadian mother (which makes me half-hoser).

If the LA Kings can make $82 million in revenue selling hockey to people living in the heat, I think a well-marketed, world-branded soccer team can rather easily top that.

The only question is can the Galaxy actually pull it off. It's obvious they want to.

 

More evidence: In Australia there is a bidding war to see which team can lure Galaxy for a friendly.

http://sports.yahoo.com/sow/news?slug=afp-fblasiaausbeckham&prov=afp&type=lgns


No mention of any bidding war for the winner of MLS Cup.

 

Do anything about this evidence support the idea that the Galaxy will be able to spin more money off of a foreign tour than Real Madrid?

 

Now ESPN has a "Beckham Watch: Countdown to U.S. Arrival" The hype machine continues to roll:
http://soccernet.espn.go.com/section?id=mls&cc=5901


To answer the preceeding question. Real Madrid had the highest revenues in the world at $374m. in 2006, according to Forbes.
Galaxy do not have to match Real Madrid.

To get to $100m. they have to match Ajax, a team located in a country with fewer people than Southern California.
There aren't even 1 million people in the city of Amsterdam and just 16 million in Holland. There are more than 300 million people in the United States. And there are millions in Japan and Australia and England and billions in China.
How much Ajax swag is sold in those countries?

$100 m. just isn't that much in the U.S.
Heck the Seattle Mariners had revenues of $179 million in 2005, according to Forbes.

Free your minds, all is possible.

 

That wasn't the preceding question.

Obviously, not all of Madrid's revenue came from an Asian tour. I'm just asking you to think like a businessperson. Real Madrid was a global brand before Becks. And I'm pretty sure that they never netted more than $10m from any tour.

Barcelona only got $5m from its sold-out US tour, where ticket prices were pretty high.

Not to quibble, but no, there are not "billions" in China. I've worked in China. It's a tough place to make money. It's also full of locals who are also bright and trying to figure out ways to make money.

Step 1. Steal underwear. Step 2 ???. Step 3: PROFIT!

Your optimism is refreshing.

 

Optimism -- it's sunny outside.

I have no idea what kind of revenue Galaxy will generate on the road. It sounded like the bidding was getting close to $1m. for one game in Australia. I imagine it will be similar at other sites, maybe more in Japan.

Two quick points:
-- It's not the ticket sales and appearance fees that get you to $100m. It's the merchandising and marketing. Can Galaxy sell a TV package in Asia? Galaxy TV? I know I watch Arsenal TV.
-- Please remember that Leiweke said "revenue" and not "profit." The Seattle Mariners revenue in 2005 was $179 million. The profit was about $7 million.

 

I agree with you -- everyone concedes it's hard, but I think it is exciting that an MLS team has reached to point where it is willing to give it a try.

At some point, for any enterprise to get to the next level it has to be willing to take a chance. AEG has done just that, and they deserve enormous credit for it.

I think the odds of success would go up considerably though if they can get another team or two to join them in the attempt -- something that really has happened yet.

 

I agree with everything you said. I think though that if AEG does indeed want to get to that status, they need other clubs financially and realistically vying to get to that "Superclub" status that are not owned by AEG. No disrizpekt to Dynamo or Fire, but AEG can't and shouldn't do it on their own.

Perhaps Toronto FC, DC United, or another team with a mad fanbase that isn't AEG and has money should step up and go for it.

 

You probably have to control your stadium to do it, if for no other reason then it provides even more merchandising opportunities. That would make it tough for DC United, although with the Galaxy they probably have one of the most recognizable brands in MLS.

TFC certainly has deep enough pockets to try it. They need to get their feet on the ground in MLS first though.

Still, I hope another team gives it a go, or like the Cosmos before them, there is a risk that the Galaxy would become "too big" for the league -- an anomaly that won't help the league become more successful. I grew up as a fan of the Minnesota Kicks, and while the drew exceptionally well (second only to the Cosmos for a couple years) well and were successful on the field, they were no where near the Cosmos in stature. By that I mean, tickets didn't fly out of the box office in Tulsa because the Kicks were coming to town.

It isn't healthy for a league to have a single "super club" IMO, but rather than put a speed governor on the Galaxy, I would rather have a couple more try to make the jump, which would create intense rivalries that drive television ratings and provide more "must see" away games in more markets.

 

possible solution to the big club / small club salary problem: luxury tax (like MLB)