David Beckham - MLS

David Beckham And The MLS – What Now?

 

As a player in 2007, David Beckham helped transform football in America when he left Real Madrid for LA Galaxy. Now, as part owner of a new franchise in Miami, just how can he help take the game to the next level?

David Beckham looks nervous. The 42-year-old Englishman has never really been one for public speaking. He’d rather play football in front of 70,000 than speak in front of 700, and today there’s a lot on his mind. Tightly clutching the black and white scarf draped around his neck, he steps forward and takes a deep intake of breath.

A decade has passed since Beckham first embarked upon a mission to bring soccer to the American masses, and his 2007 decision to join LA Galaxy from Real Madrid was a game-changer for Stateside football. Major League Soccer (MLS) had only come into existence 11 years earlier, and here was a global superstar, albeit in the twilight of his career, determined to preach to the unconverted. The country hadn’t seen anything like it since the 1970s, when Pelé, George Best and Bobby Moore all finished their careers in the now defunct North American Soccer League.

“Hello Miami,” says Beckham, leaning into the microphone and clutching the ends of his scarf even tighter. His knuckles turn a shade of white. He pauses, before nervously offering a “hola Miami” to the city’s 70 per cent Latino majority. His Spanish is met with delight by the assortment of watching journalists and members of the public. This is Beckham’s second coming; his return, not as a player, but as part owner of a new MLS franchise in Miami.

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Like Pelé 42 years earlier, Beckham’s impact on football in the States was instant. Hollywood A-listers flocked to watch him in a Galaxy shirt while media and fan interest went stratospheric. Despite return forays to Europe during each winter break, he was the attention magnet that firmly put MLS on the map.

But bigger plans were afoot from day one. As a sweetener to lure the very marketable Beckham from Madrid to LA, the MLS inserted a clause in his contract that allowed him a heavily discounted expansion fee, should he ever show an interest in starting his own team. While regular expansion fees of the time stood at around US$100m, a Beckham-led ownership group would be allowed to pay just a quarter of that. In 2018, that official MLS buy-in figure currently stands at US$150m.

David Beckham - Miami

In 2014, seven years after signing for Galaxy, MLS announced that Beckham had exercised his option and would attempt to build a new club. But the journey from initial idea to authorised franchise hasn’t been easy, even for the former England legend. The four-year project looked doomed at a number of turns – particularly regarding the development of a new stadium – before he and his five fellow owners (Masayoshi Son, chairman of Sprint Corp and CEO of SoftBank, Miami-based Jorge and Jose Mas, the chairman and CEO, respectively, of engineering firm Mastec, Sprint Corp CEO Marcelo Claure and entrepreneur Simon Fuller) were given the green light by MLS to become its 25th franchise and hopefully begin playing competitive football from the 2020 season.

But while the road to fruition might have been a little bumpy, the league, and nation, ultimately welcomed Beckham back with bells and whistles, and given his impact as a player, that should really come as no surprise.

“Beckham’s arrival in 2007 not only elevated the status of MLS, creating a tremendous buzz in LA and around the country, but it also stoked specific interest in MLS from other cities, many of which have since been granted a team,” says David Carter, the executive director of the University of Southern California’s Sports Business Institute.

“His arrival helped establish, and then build, interest in the sport and the league nationally over time and that has contributed to its growth. In short, he was an accelerant.”

After he retired, Beckham held discussions with MLS hierarchy over potential locations to activate his clause and Miami emerged as the leading contender.

While Forbes estimated that Beckham made around US$255m in his five and a half years at Galaxy, he’s not simply here for another bumper payday. Although Beckham has never shown any inclination to enter the dugout as a manager, he has always harboured an interest in the business side of football, according to his former Galaxy teammate and MLS record scorer, Landon Donovan.

Donovan – himself part of a group looking to launch an MLS franchise in San Diego – said, “He’s smart, understands the game, has great business savvy and genuinely cares about the sport. “It doesn’t surprise me that he [Beckham] decided to get involved in running a club. It’s something that’s always interested me and likewise, David wants to continue to help grow the game here in the US.”

Beckham is far from a silent partner in the venture, too. He has already led talks with his fellow owners over the club’s future playing philosophy, along with fielding calls from former teammates about playing and coaching opportunities in Florida.

“I’ve been approached by many different players from many different teams I’ve played with or against, and there’s interest there, but you can’t really have those conversations just yet,” he explained to the Miami Herald.

But as Beckham holds talks over the fine print of his new enterprise, he’ll find the MLS a very different proposition to the one he left. By 2007, the league had expanded to 12 teams from its original 10, and the rate of additions since then has been rapid. The 2018 arrival of Los Angeles FC takes the number of combatants to 23, and more clubs are on the way. Nashville will eventually become the 24th team in MLS, while Cincinnati, Detroit and Sacramento have all submitted their own bids to join the league.

Investors continue to chomp at the bit to form new franchises, because there is a feeling that the US remains a huge, untapped market for football. For instance, among televised sports in the US, football – the MLS, Premier League and Mexican Liga MX – has by far the youngest demographic.

Three years ago, Manchester City launched a sister club, NYCFC, in New York for that very reason. The City Football Group’s Boston-born chief commercial officer Tom Glick revealed why. “This is the biggest participation sport in the United States. It’s been growing since I was a kid,” he said.

“I watched it in the ’70s and thought it was a big deal when I was playing. But I’ve seen it grow. I’ve got children of my own now, who are in their 20s, and they all play. This has been a building movement and we’re big believers; we think it’s underdeveloped. The primary school kids, the teens and the millennials are following it and identifying with the sport. We’re convinced that it will continue to grow,” Glick added.

David Beckham - LA Galaxy

That youthful movement could be key to its success across the board. Scour the current 23 clubs and their squads are no longer filled with ageing household names from European football in search of one last lucrative contract. That trend was arguably started by Beckham, and followed when the likes of Thierry Henry, Andrea Pirlo, Steven Gerrard and Frank Lampard all dipped their toes into the MLS waters. While some proved successful, others were less so (type ‘How to defend like Pirlo’ into YouTube to see what we mean).

However, as Beckham proudly stated in his press conference, homegrown talent is now the order of the day, and franchises and recruiters are focussing on retaining established US internationals as well as landing young players from South America. In January, Atlanta United splashed out an MLS record US$15m to sign the 18-year-old Argentine midfielder Ezequiel Barco from Independiente. That’s a big sign of intent.

“I know what life is like in Argentina. I played a lot of football there and if you are good you are [Lionel] Messi, but if you are bad you are a disaster… I really like this league [MLS] – and the life I have here”

Veteran Argentine player Ignacio Piatti moved to North America four years ago to join Montreal Impact, and believes that the MLS is an attractive proposition for South American players. “I know what life is like in Argentina. I played a lot of football there and if you are good you are [Lionel] Messi, but if you are bad you are a disaster,” he explained. “And you have to live with that, even inside your own house, because they [the fans] do not respect the person.

“I really like this league [MLS] – and the life I have here in Canada. The league is growing fast and there are players from all over the world.”

Atlanta is one of the clubs that has helped MLS’ popularity reach an all-time high. In their inaugural season last year, they boasted an average attendance of 48,200 – bigger than any NBA, NHL or MLB team in the country. As a contrast with the English Premier League, that’s more fans than current league champions Chelsea get through the turnstiles at Stamford Bridge.

Total MLS attendances in 2017 smashed the eight million mark, while its television audience is growing too – unlike the NHL, MLB and the NFL, which are all experiencing alarming ratings dips. Over the course of the year, more than 26 million viewers tuned in to watch the MLS – that’s a rise of four per cent – and all the future signs appear positive. There’s just one small problem: MLS still doesn’t make enough money to turn a profit, and it hasn’t since the first ball was kicked in 1996.

Part of the problem is cultural and, commercially, the traditional American sports continue to dominate the market. Perhaps as a knock-on effect from this, the revenue recouped from television rights is currently worth around US$90m a year. While that might appear a high figure, it’s a relative pittance in footballing terms – akin to the income received by the Dutch Eredivisie. It’s certainly a far cry from the billions recouped by the Premier League in England.

If MLS wants to move from the red into the black in the long term, then the negotiations over the next broadcasting deal (the current one runs until 2022) need to result in a significant hike, and the only way that will happen is if there are more eyeballs on the product, more fans in the stadium and, probably, bigger names on the pitch.

Carter also believes that clubs need to look at other streams of income to maximise their return. “Revenue sources emanating from media and sponsorship deals are very important towards the league eventually making a profit,” he said. “So, too, is the ability to not only programme the stadiums with other events, but also to develop the real estate around them. This is increasingly vital in terms of annual profits and long term gains.”

But can Beckham himself be the catalyst for greater cash flow? Directly, no; indirectly, yes, is Carter’s prediction. “Beckham’s impact on MLS this time around will be far less powerful from an outward-facing perspective,” he says. “But his presence in ownership will draw additional attention to the league from those who follow the business of soccer and want to invest in it.”

Words: Chris Young

 

 

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