The LA Galaxy are owned and operated by sport and entertainment giants AEG, perhaps the most influential corporate player in the American soccer industry. Headed by billionaire Phil Anschutz, AEG owns additional MLS teams in Chicago and Houston, having recently sold its interests in teams based in Washington, DC and New York (the latter to Red Bull). The group also run the David Beckham Soccer Academy located at AEG's Home Depot Centre in Los Angeles, also home to the Galaxy.
Notwithstanding the Beckham deal, MLS will still operate under a salary cap. Rules, however, were changed late last year to allow 'marquee players'. Commonly known as the 'Beckham Rule', given the level of expectation that he would join MLS at some point, the directive in effect allows a maximum of two players on each team to be counted outside salary-cap restrictions.
The $150m MLS league sponsorship by adidas has also perhaps worked in favour of the deal being finalised. Other high profile MLS signings are expected in the January transfer period and beyond. Unlike more established US professional sports leagues, MLS has to date not employed a household name and despite significant publicity, Freddy Adu has yet to live up to expectations.
With MLS preparing for its 12th season in April, professional soccer is now clearly established in the US and reaping commercial benefits. Last summer, MLS signed its first ever rights fee deals (with four individual television stations) and more recently announced it will allow major shirt sponsors for 2007, the first professional league in the US to allow such advertising. With the addition of Beckham, the Galaxy are expected to attract a shirt sponsor in line with major European teams. International brands, including Pepsi, Honda, Chase, Panasonic and Budweiser, are already aligned with MLS and keen to target the significant number of American children who play the game as well as the growing Hispanic population.
According to Jeff L'Hote, Director of North American Operations for FMMInternational, a London-based soccer consultancy and authors of 'Soccer in North America: The Commercial Opportunities', a comprehensive resource to the business of soccer in the US, MLS could not have signed a better player to promote soccer in the US: "MLS has yet to captivate the 15+ million children who play the sport in the US. Beckham will instantly give the league more credibility and should inspire young players to support MLS and to set their sights on one day emulating Beckham.
From a commercial standpoint, MLS will also gain from foreign interest. Where six months ago it was paying to have its matches televised, MLS now stands to gain significantly from international rights fees and sponsor interest, which will also ultimately benefit the American player. The future of soccer in the US has never looked more promising."
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