I've previously blogged about the salaries of pro athletes. It's hard to ignore the 24/7 hype surrounding the British soccer star David Beckham and his reported $250 million dollar pay day. He is playing for the Los Angeles Galaxy soccer team, which hopes the Euro footballer can create excitement for a sport that never quite caught on in the U.S.
The question is, how much is Beckham actually earning in annual salary? Will he really earn $250 million in compensation?
As reported by the Houston Chronicle, Beckham's annual salary will be $5.5 million a year (plus another unspecified million) for the next five years. Does this join the ranks of overpaid professional athletes' salaries? Major League Soccer (MSL) player salaries normally cap at $2.4 million, but the new "Beckham Rule" allows for exceptions of certain professional athletes' high salaries. According to the Washington Post, the average soccer player salary in the MSL is $115,432; about 30 percent of the MSL players are under developmental contracts and earn $17,700 or $12,900.
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This isn't the first time America has lured an international soccer star to its shores. In the 1970's, Brazilian soccer icon Pele played for the New York Cosmos in the now-defunct North American Soccer League. Like Beckham's jump across the pond, the intent was to boost the profile of soccer in the United States, but the buzz was only temporary.
Major League Soccer owners recall those days, but are still hoping that Beckham will deliver the kind of excitement that Sammy Sosa and Mark McGwire brought to baseball. Major League Soccer commissioner Don Garber told the L.A. Times, "The real impact of David coming here is not about what will be experienced today but what will be experienced tomorrow as we ... build the dream that MLS can be considered one of the great soccer leagues around the world."
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So what is the origin of the $250 million number? It was part of a January press release crafted by Simon Fuller, the brainchild behind American Idol and the Spice Girls. Fuller, who is also David Beckham's business rep, was actually referring to the $250 million "potential value" of Beckham's contract. For Beckham's pay day to actually equal $250 million, Americans are going to have to go ga-ga for soccer.
Let's crunch the numbers and see where Simon Fuller got this potential $250 million. We have David Beckham's $5.5 million annual salary over 5 years and his guaranteed extra million each year, that's $32.5 million. He is also being paid $25 million by Herba Life for placing its logo on his jersey. That gives David $57.5 million. Add $20 million in "existing" corporate endorsements from sponsors such as Motorola, and that brings David up to $77.5 million.
Not Your Average Soccer Player Salary
David will also earn an unspecified amount for a Spice Girls reunion tour featuring his wife, Victoria a/k/a "Posh Spice." The tour will perform in major cities in venues owned by AEG, which also owns the L.A. Galaxy. There also other unspecified profit-sharing deals with the L.A. Galaxy and its corporate partners that depend on merchandise and tickets. According to Reuters, L.A. Galaxy shirts have already sold a quarter-million (at $80 each), and ticket sales are up, but for how long?
Since many of these revenue opportunities would not be coming David Beckham's way without the Galaxy deal, I suppose it is far to count these as potential compensation for playing soccer - or not playing since Beckham is still injured.
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Dr. Al Lee