David Beckham residence Beverly Hills
LA Galaxy
2007: First season in MLS
Beckham's involvement with Major League Soccer (MLS) began while he was still a Real Madrid player when it was confirmed on 11 January 2007 that he would be leaving Madrid in six months to join MLS side LA Galaxy. The speculation about his new contract in Madrid was thus put to an end and the following day Beckham's official press conference was held in conjunction with the 2007 MLS SuperDraft.The announcement made global headlines and elevated the league's profile. Though many worldwide media outlets reported the deal to be worth US$250 million, the astronomical figure was soon revealed to be something of a PR stunt engineered by Beckham's media handlers (British representative agency 19 Entertainment). To maximise the media effect, in the press release they decided to list the potential sum that Beckham could make over the five-year period from all his revenue sources, which in addition to his Galaxy pay also include his personal endorsements. Beckham's actual deal with the Galaxy was a five-year contract worth US$32.5 million in total or $6.5 million per year.The high-profile acquisition paid immediate financial dividends for Galaxy long before Beckham joined the team. On the strength of the signing and the media frenzy it created, the club was able to pull off a new five-year shirt sponsorship deal with Herbalife nutrition company worth US$20 million. The gate revenue peaked as well with 11,000 new season tickets holders and sold-out luxury suites (each one of the 42 inside the team's home stadium, the Home Depot Center). LA Galaxy owners Anschutz Entertainment Group (AEG) also reported an immediate spike in business. Involved on many business fronts worldwide, AEG was already leveraging its Beckham association in places such as Shanghai and Beijing, where the company had been working aggressively for years to receive clearance to build arenas and stadiums. The company's CEO Tim Leiweke put it as follows: "Suddenly, we're known as the company that owns the team that David Beckham is going to play for, so our world changed".In the months following the announcement, the additional terms of Beckham's contract became public knowledge. One unique contract provision was giving him the option of buying an MLS expansion franchise in any market except New York City at the fixed price of $25 million whenever he stopped playing in the league – an allowance that the league's owners had never given to a player before. Another provision was the opt-out clause after the 2009 season, meaning that should he decide so, Beckham was free to leave the club after completing year three of his five-year contract. The league had a salary cap in place, requiring the creation of the Designated Player Rule for Beckham to bypass the cap; the rule was later nicknamed in his honor. In April 2007, he and wife Victoria bought an $18.2 million home on San Ysidro Drive in Beverly Hills.
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