David Beckham plans to take up an option to buy a 25 per cent stake in the Los Angeles Galaxy after he leaves the American football franchise, with a view to forming a consortium to purchase the Major League Soccer club outright.
The right to buy part of a franchise was part of the original agreement with the Galaxy’s owners AEG to bring Beckham to Major League Soccer in 2007. It was agreed with a view to incentivising the 37-year-old, who plays his final game in the MLS Cup final against the Houston Dynamos, to increase the value of the league and the team.
Beckham has the option to buy a new MLS franchise for a fixed price or use that option to buy a stake in a higher-valued established franchise. In the case of the Galaxy he would like eventually to be part of a consortium that takes over the club along with other investors, leaving him as one of the franchise’s owners.
While Beckham could buy a new franchise outright, he is not interested in any other than one of the biggest names in US soccer. Under the terms of his deal he is not permitted to buy the new, second New York franchise which is valued much higher than other recent franchise launches.
It has not been disclosed the exact value of Beckham’s option to buy but he will put his own money in the deal. He has long been a de facto shareholder in the MLS with a percentage of the Galaxy’s commercial deals. For instance, he was entitled to 50 per cent of profits on increased replica shirt sales in his original five year deal.
Much will depend on what price AEG place on the Galaxy. The value of the franchise had been valued at around $100m, especially after the sale of DC United, another leading MLS franchise in November for $50m.
Galaxy are one of the few profitable franchises in the MLS, although there have been major developments in the sport in the last five years. Beckham himself has cited the launch of six new franchises and the building of six new stadiums during his time in the league as proof of the increasing popularity of professional soccer in the United States.Reuse content