When moving from Real Madrid to Los Angeles Galaxy, David Beckham took a 70% pay cut, but ended up winning hundreds of millions of dollars
David Beckham showed incredible foresight or business acumen, agreeing in 2007 to replace Real Madrid, Champions League and La Liga games with the life-changing, but very sad Los Angeles Galaxy from MLS. Moreover, the Englishman agreed to a 70% reduction in wages – from $20 million in Madrid to $6.5 million in Los Angeles.
Many considered Bax to be a madman, however, as it turned out, the Englishman showed simply miracles of insight, increasing his financial condition tenfold. Moreover, with his arrival, MLS also won, gradually turning into one of the most expensive and financially attractive football leagues in the world. A detailed analysis, as it turned out, of one of the best and fateful contracts in the history of football, was dismantled by a journalist, financial analysts and an investor Joe Pompliano.
Summer 2007. David Beckham – one of the most recognizable and popular football players in the world, playing in the best club in the world – Real Madrid and married to Victoria Adams of the Spice Girls, agrees to an incredible step: moving to America and playing in MLS for Los Angeles Galaxy. Moreover, on significantly worse financial conditions than he had in Real Madrid. The League itself urgently had to adopt the “Beckham Rule”, which allows up to two players to be taken out from under the salary cap established in the MLS – even the $ 6.5 million due to the Briton was then beyond the League.
Most of this decision was associated with the desire to move to Los Angeles, the wife of David – Victoria. But many did not take into account several important details, which eventually played out.
Beckham was able to negotiate a percentage of all the team’s income as part of his contract in Los Angeles. The “all income” clause really meant everything – sales of licensed goods, tickets, sponsorship contracts, etc., right down to hot dogs and beer sold on matchday. It is clear that this dramatically increased the overall earnings of Becks: if you add up salary, sponsorship contracts and a share of the club’s profits, Beckham earned about $ 255 million in 5 years at the club. On average, this is more than $ 50 million a year, which made the Briton the highest paid football player in the world at that time.
Further more. Beckham also negotiated a $25 million right to buy the team if the League expanded after his playing career ended. True, then it did not seem like some kind of super conditions: for example, Toronto at that time paid only $ 10 million for the franchise. But now, the price has gone up significantly. The same New York paid $100 million for “entrance to the League”, Austin, Cincinnati and Nashville – $150 million each, St. Louis – $200 million, and Charlotte – $325 million. So when Beckham exercised his $25 million option to buy the team, he got an incredible “discount” of hundreds of millions.
The club created by David – Inter Miami – officially played its first game on March 1, 2020. But now the club is in the TOP-10 most expensive in the MLS, its value is estimated at $585 million. That’s 2,240% more than what Bax paid for the franchise.
But don’t underestimate the influence of Beckham himself on the League. Since his transfer, MLS attendance has risen 40% and the league’s television contract by 3,025%, from $8 million in 2006 to $250 million today. Next in line is another price increase.
In addition, the MLS has expanded significantly since that time, which has affected the cost of the franchise. In 2008, it was estimated at 37 million dollars, in 2022 – at 582 million (an increase of 1,472%).
Summing up all the above facts, we repeat what was said at the beginning of the article: Beckham’s transition to Los Angeles Galaxy, if it seemed like a gamble, then only at first glance. The Becks turned his $6.5 million one-year contract into almost half a billion in the same currency, and the League received incredible momentum towards its goal of becoming one of the most attractive football tournaments. It truly was the deal of the century for American football.
Source: Sportarena
I’m Scott Moore, a professional writer and journalist based in the US. I’ve been writing for various publications for over 8 years now, and have been working as an author at athletistic for the past five years. My work has been featured by some of the leading sports websites and magazines across Europe.
