Spending it on Beckham
CAA, $250 mil bring star to L.A.Sports celebrity and merchandising magnet David Beckham, his Hollywood-enamored Spice Girl wife by his side, is headed to Los Angeles with a new, five-year, $250 million soccer deal that CAA helped to negotiate.
Beckham — yes, as in "Bend It Like Beckham" — and his wife, Victoria, aka Posh Spice, are daily tabloid fodder in England and many other soccer-crazed countries, including Spain, where he now toils for the Real Madrid squad. He will continue to play there through June before joining Major League Soccer's Los Angeles Galaxy later in the summer.
But he is no mere soccer player.
Beckham is managed by Simon Fuller, creator of "American Idol" progenitor "Pop Idol" and Spice Girls. And the athlete's ability to sell products of all sorts — including, of course, zillions of replica soccer jerseys — is so legend as to prompt many in the sports media to suggest it was actually Beckham's marketing magnetism that moved Real Madrid to pay $41 million in transfer fees to acquire his services from England's Manchester United in 2003.
Beckham, a globe-trotting socialite whose Hollywood pals include Tom Cruise and Katie Holmes, already has sparked a surge in Galaxy ticket sales even though he likely won't join the team until four months after the April start of the MLS season. Adidas, for which he endorses athletic gear, also should be happy about his moving into the U.S. market.
Meanwhile, if all the global hubbub over a 31-year-old blond-locked pretty boy athlete is hard to believe, consider that it's a shtick that's just netted Beckham personally a cool $50 million a year. Few athletes earn more, though Forbes magazine estimated that Tiger Woods earned $87 million in golf winnings and endorsements compensation in 2005.
Although the explanation for Beckham's pay deal goes well beyond his forte for banana-shaped free kicks or other soccer abilities — skills generally considered to be on the wane — it also begs media scrutiny of how the famously thrifty MLS or its Galaxy franchise can afford to pay so high a sum.
The league has declined to disclose precise financial details of the deal, but officials have indicated that the actual soccer-salary portion of the agreement represents about one-fifth of the total, or perhaps $10 million a year. The balance comes from "commercial opportunities" arising from a separate agreement hammered out by CAA Sports and Fuller's 19 Entertainment.
As much as $10 million of Beckham's other annual compensation is tied to profit-sharing clauses in his employer agreements, a source close to the player said. The source said the nonsoccer components of the deal represent "conservative estimates" of his compensation under the various deal terms, accounting for such items as shirt sales, endorsements and sponsorship money.
Surely, Beckham was able to land such a lucrative arrangement thanks to the fact that it is billionaire financier-turned-entertainment mogul Phil Anschutz who owns the Galaxy (as well as two other MLS franchises).
"This historic partnership with 19 Entertainment and CAA Sports will also create tremendous and exciting new opportunities for us to collectively develop additional worldwide initiatives," said Tim Leiweke, CEO of Anchutz's AEG sports group. "The synergies created with 19 Entertainment, the worldwide leaders in branding and imaging, along with CAA Sports, (will) result in numerous new and profitable ventures."
To facilitate such largesse, the MLS last year passed a new "designated player" rule, allowing teams to exceed its severe salary strictures for one player.
Even before Thursday, it quickly became known among sports media as the "Beckham Rule."