David Beckham will reportedly earn $250 million in a five-year deal to play soccer in the United States — but at least 80 percent of that money has nothing to do with kicking a ball for the Los Angeles Galaxy.
Although Beckham, who will start with the Galaxy after his Real Madrid contract expires June 30, will become the highest-paid player for Major League Soccer in the United States, MLS sources say his annual playing income is only in the "single-figure millions."
With Beckham getting paid up to $50 million over five years for playing soccer, where does the rest of the money come from?
"Most of the value is from David's worldwide endorsement," MLS Deputy Commissioner Ivan Gazidis said Thursday. "That's a separate deal. That's his deal with Creative Artists Agency and 19 Entertainment. That's not something we're involved in.
"Obviously I think the feeling is that coming to the United States boosts the value of (the Beckham) brand and the revenues that can be generated from it, but that's not our business," he said. "It wasn't part of our contract discussions at all."
Beckham's playing contract falls well short of the big deals signed in Major League Baseball, where Alex Rodriguez is being paid $252 million and Derek Jeter $189 million, both over 10 years.
Scott Branvold, a professor in sports management at Robert Morris University in Pittsburgh, said the Beckham brand — which includes the soccer player's wife, former Spice Girl pop star Victoria Beckham — goes well beyond the game of soccer.
But he questioned whether Beckham truly could earn $200 million over five years through sponsorship and other business deals.
"Soccer has struggled so much in the United States that you certainly have to wonder whether there is any realistic possibility. Maybe he will do a reality show," he said.
"The fact that I would recognize who he is, and he hasn't really played in the United States, probably is commentary to the fact that his name is probably somewhat bigger than soccer itself," said Branvold.
Beckham earns about $7.7 million a year from Real Madrid and an estimated $30 million more from sponsorship deals with names such as Adidas, Gillette, Motorola and Pepsi, although 50 percent of his image rights go to the Spanish club.
"There are a lot of commercial elements in our deal with him — the sale of jerseys and those types of things — but when you are talking about the Beckham brand, where most of his revenue earning opportunities are, it's independent of the league," Gazidis said.
The 13 teams in Major League Soccer have an annual salary cap of $2.1 million for a roster of 18 players. But a new "designated player rule" — dubbed the "Beckham rule" — allows teams to pay above the salary cap for one player.
"We had a league in the late '70s and early '80s, the North American Soccer League, which went out of business because of uncontrolled spending by owners. This is not uncontrolled spending," said Gazidis, who handles player signings.
He said the league feels now is the right time to "strategically invest" in a name player and Beckham's presence would deliver value to MLS broadcast partners and sponsors and help drive up team values.
"But more importantly than all of that, he is a figure that has the ability to give soccer more cultural relevance in this country, and that's really what's driving this from our standpoint," Gazidis said.
More than 1,000 new season tickets were sold by the Galaxy Thursday alone after news of the Beckham deal, while Toronto FC — which will debut in the MLS this year — sold 100 season tickets.