Thursday 2 October 2014

Major League Beckham: Mindless Football Star or Hollywood Robber Baron?

“Football is an industry” and “football is entertainment” are two oft heard statements that true (European) football fans tend to have an allergic reaction to. Previously, because both were missing the point. Nowadays, perhaps more because of saudades to a long lost past. Authoritative sports news site sporza.be could not go past the presence of Beyoncé during Tuesday’s Qatari derby, PSG vs. FC Barcelona. So even those who did not see the CL game could rest assured they were abreast of its essentials.

A more noteworthy appearance in the Parc des Princes’ stands was David Beckham, who had concluded a most successful playing career in that very stadium with a heart-warming standing ovation only last year. What struck me most about Beckham’s close-up on Tuesday was how genuinely happy he seemed. According to the 'football as an industry' philosophy, it may have been an unpleasant day for him, though, as it was announced Kaká would soon be taking over from the former England captain as highest paid foreign player in the history of the MLS: Kaká will be netting US$ 7.1m p.a. at Orlando City, whereas Beckham reportedly earned US$ 6.5m p.a. when at LA Galaxy.

Source: futbolpulse.com

Even if he cared much about the money – and in case he doesn’t, surely his wife will – I would expect this comparison merely made Beckham smile. Abstracting from any sponsorship-related revenue, when signing his contract at LA Galaxy, Beckham's entourage ensured the inclusion of a clause that had been negotiated with the MLS. It concerned an option to enter a franchise team in the MLS (i.e. the US Premier League) in the future at an exercise price of US$ 25m – a fraction of what recent expansion teams were ordered to pay to the league (US$ 100m in the case of NYCFC and US$ 70m for both Atlanta and Orlando City). Furthermore, it is not just about coughing up the money; ask even the legendary NY Cosmos of Pelé and Beckenbauer how hard it is to even be considered for an MLS franchise these days. It should not be all that surprising, then, that already in early 2014, less than a year after his retirement, Beckham informed the MLS he intended to exercise his option.

Beckham’s expansion-team idea is a worthy textbook example of how to create and negotiate an outside-the-box option, one that is very easy for the other party to grant – it effectively cost the MLS zero at the time of negotiating Beckham’s LA Galaxy contract – and extremely valuable to oneself – a future monetary value of roughly US $70m to Beckham. Additionally, it was not the first time Becks and his entourage pulled off a trick like that. Beckham's signing for Real Madrid, in 2003, was facilitated by what became known as the 'Beckham law', a tax regime taxing qualified foreign workers in Spain at the lowest tax rate, regardless of their earnings. And when he then moved to the MLS, they there enacted...the 'Beckham rule', allowing for teams to designate a high earner to be exempt from the team's salary cap. Curiously also, in each of these cases, the major concession was beyond the prerogative of the club and was granted by a higher authority they somehow had been able to interest, viz. the league or the state.

And almost all of the credit goes to David Beckham. Did he come up with the expansion-option idea all by himself? More likely, he did not even have a clue about the stipulation as he signed his LA Galaxy agreement. Beckham is very much aware of the fact that he was not born the world’s smartest guy. It takes a humble person to acknowledge this and act upon it: Beckham thus surrounds himself with some of the canniest to take care of his business for him, rather than agents looking to sell him. So many averagely smart people refuse to acknowledge any need to do so and they tend to see their fortunes mysteriously vanish before their eyes as soon as they hang up their boots. The Greek philosophers can be proud of Beckham. Few if any in contemporary showbiz embody the adage that self-knowledge is the basis of all wisdom as well as this simple, working-class-born billionaire.

Source: foxsports.com

Regardless of the mostly irrelevant discussion about whether Kaká will actually become the highest-earning foreign player in MLS history, observers of the premier US soccer league may actually have something to get excited about. Next to Kaká, also Frank Lampard and David Villa are moving to the Land of the Free. And who would be surprised if Ronaldinho were to jump the Mexican border and pass through the MLS before playing his final trick?

Other than European leagues – at least traditionally – the MLS, by origin, is indeed an uncovered industry and so is David Beckham himself. In addition to having gotten the most out of his career and his image, Beckham is also getting the best of both worlds – idolatry in Europe and big business in the USA. One year after his retirement, he has all reasons to look happy. There is not a cloud in the sky for David. Whereas many of the stars of his generation must fear the uncertainty of whether they are found fit for a coaching career, Becks can soon preside over his own Miami-based club – and with a huge discount. It remains to be seen whether we will again witness someone who can bend it like Beckham.