Beckham rejected Milan and Inter to take Galaxy millions

David Beckham rejected the chance to sign for the Italian giants Milan and Internazionale as well as Marseilles and Lyon in France before he opted yesterday for the best commercial deal at Los Angeles Galaxy and a staggering £128m, five-year contract.

The notion that Beckham, 31, signed for LA Galaxy because he had no chance of playing Champions' League football has been dismissed after sources revealed that he was pursued by some of the biggest names in world football. Internazionale are seven points clear at the top of Serie A and Lyon lead the French championship by 15 points and both are serious contenders in the last 16 of the Champions' League this season.

There were also several mid-table Premiership clubs interested, thought to include the likes of West Ham United, Bolton Wanderers and Newcastle United , but Beckham's advisers made it clear that the former England captain was only interested in a move to either Chelsea or Manchester United.

It is understood that Beckham, who had won six Premiership titles and played at three World Cup finals, had no interest in a team scrapping for the Uefa Cup places or worse.

Beckham's salary will top the entire current Major League Soccer (MLS) salary package where clubs have to disclose their salaries. In LA Galaxy's budget, their lowest earner is on $11,000 [£5,650] - the equivalent of a couple of hours' work for Beckham. However, it will be the response of the American public to a Chingford-born boy who does not play any of their three major sports which will determine the extent of Beckham's salary.

It was not clear last night exactly what Beckham will have to do to earn £128m which is, to a large extent, bonus-related, although a source revealed that it was "achievable". In order for him to earn the full amount of bonuses he will not be able rely just on the performance of the LA Galaxy, who finished well out of the running for the play-offs last season. He will also have to earn his team and MLS the kind of profits they crave.

The final Beckham pay packet will be dependent on the television and sponsorship deals that the league earns. Games are broadcast on ESPN, Fox and Hispanic networks, although the size of the $20m annual deal is reflected in players' salaries. After Beckham the highest earner is Juan Francisco Palencia of Chivas USA, who earns $1.36m [£700,000] a year. Incredibly, MLS matches were only sufficiently in demand for the league to charge for television rights for the first time last year. Before then, MLS paid the networks to broadcast games.

The Beckham deal is also likely to include any new endorsements that he signs as well as any potential movie deals that involve him and to earn that full amount he will have to lead a change in American sporting culture. There are still serious doubts that his arrival will finally persuade America to take "soccer" to its heart. LA did not have enough sport fans even to support an American football team and both the Rams and the Raiders franchises have moved on.

Beckham said that, having played for "two of the biggest clubs in football", he wanted the "new challenge of growing the world's most popular game in a country that is as passionate about its sport as my own. I didn't want to go out there [LA] at 34 and for people to turn around and say, 'He's only going there to get the money'. It's not what I'm going out there to do. I'm going to, hopefully, build a club and a team that has a lot of potential. I think that is what excites me."

Although Beckham was full in his praise for Real Madrid, the sour end to his four years there could yet mean that the backers of the LA Galaxy try to reach a deal for him to come to America before the end of the Spanish season. The MLS season starts in April and Beckham was not even named among the squad for the cup game against Real Betis last night.

Faced with the humiliating prospect of being frozen out for the rest of the season, Beckham and his advisers acted swiftly. His personal manager, Terry Byrne, was under pressure from Real Madrid, who wanted an answer to the new two-year contract that has been on offer for weeks. The high-profile LA Galaxy announcement yesterday was the perfect PR antidote to a miserable season for Beckham.

Beckham will join the likes of Franz Beckenbauer, Johan Cruyff and Pele who joined America's first professional league, NASL, in their thirties. The agreement to bring Beckham to LA, however, was a major media deal involving some of the biggest names in the entertainment business.

His vastly complex deal, which will include full control of his significant personal image rights, was negotiated by 19 Management, the show business company owned by Simon Fuller, who lists among his achievements creating the Spice Girls and Pop Idol. He was advised by the American sports company CAA.

For Byrne, Beckham's adviser and confidant, it will be an astonishing pay day. A former masseur with Chelsea, he joined the England squad and was famously the only member of the staff to console Beckham in the immediate aftermath of his red card at the 1998 World Cup.

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