After dominating internationally for more than a decade, David Beckham moved to Los Angeles in 2007 — signing with the LA Galaxy of MLS.

The interesting part?

Despite a 70% reduction in salary, it's one of the most lucrative sports contracts ever.

Time for a thread 👇👇👇
1) First, some history:

Playing internationally from 1992 to 2007, David Beckham became one of the best players in the world.

But at 31-years-old, now a global superstar, Beckham had a choice to make — move to the US or continue his career internationally?

Hello Hollywood…
2) In 2007, David Beckham left Real Madrid — signing a five-year contract with the LA Galaxy of Major League Soccer.

From a salary perspective, the deal paid Beckham $32.5M — or $6.5M annually.

The intersting part?

He made much more than that.

Let's run through it…
3) While David Beckham's MLS contract only paid him $6.5M in annual salary — a 70% pay cut from Real Madrid — his US adventure ended up being much more lucrative.

As part of the deal, Beckham also got a percentage of team revenue — including merchandise, sponsorships & tickets.
4) By signing David Beckham — one of the most marketable athletes in the world — the MLS immediately saw tangible benefits.

Attendance hit record highs, sponsorships came pouring in & the league expanded.

With their financial incentives aligned, Beckham benefited also.
5) In total, through salary, endorsements, and revenue share, David Beckham made more than $250 million during his 5-year deal with the LA Galaxy.

At $50M+ annually, he was the highest-paid player in the world.

Even more interesting, that's not even the best part.
6) As part of his 2007 deal with the LA Galaxy, David Beckham was given the right to purchase a future MLS expansion team.

The best part?

The price was set at $25M — meaning when he exercised the option in 2014, he received a heavy discount to the current $150M+ expansion fee.
7) In 2014, David Beckham officially excercised his $25 million option to purchase an MLS expansion team — establishing "Inter Miami CF" with a group of investors.

With the average MLS team already worth $300M or more, Beckham and his investor group saw immediate upside.
8) While it's unclear if the MLS will ever see similar valuations to the NFL & NBA, they're making progress.

Vincent Tan sold 20% of his LAFC stake in Feb at a $700M valuation, which is more than some NHL teams.

Given the NHL had a 100-year head start, that's super impressive.
9) Ultimately, David Beckham's willingness to expand his brand internationally and his fortitude to think larger than a traditional salary have benefited him tremendously.

Always remember, equity is key.
10) If you enjoyed this thread, you should:

1. Follow me, I tweet cool sports business stories every day.

2. Subscribe to my free daily newsletter where I give a detailed analysis on topics involving the money and business behind sports.

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Also, don't forget @AthleticBrewing is the reason I'm able to create sports business content full-time.

If you want to support me, buy some beer - it's really great stuff.

Use code "JOE25" for 25% off at athleticbrewing.com

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More from @JoePompliano

31 Dec 20
I've written 100+ threads in the last 6 months, covering the best stories involving the money and business behind sports.

While it was nearly impossible to decide, I've picked 5 of my favorites.

Enjoy! You're guaranteed to learn something :)

Time for a thread 👇👇👇
1) The story of Junior Bridgeman, a former NBA role player who turned his $350,000 salary into $600 million.

How?

Fast food.

2) The greatest business deal in sports history.

How two brothers made $800 million as basketball team owners, without ever actually owning an NBA team.

Read 7 tweets
31 Dec 20
LeBron James graced the cover of Sports Illustrated at the age of 16 — labeled "The Chosen One."

Now 36, he's exceeded expectations.

This is the story of how @KingJames lived up to the hype, built an empire & impacted millions of lives in the process.

Time for a thread 👇👇👇
1) Let's start in 2003...

LeBron James, an 18-year-old senior from Akron, Ohio, is the greatest high school basketball player of all-time.

Nicknamed "King James," LeBron was a shoo-in to be the #1 overall pick in the NBA draft — but first he had a decision:

Reebok or Nike? ImageImage
2) Before he met with Nike in 2003, Reebok made an 18-year-old LeBron James the offer of a lifetime.

Reebok offered @KingJames $115M, with a $10M check upfront.

The catch?

He had to accept on the spot.

Despite living in a $17/month apartment, LeBron declined.

Next up, Nike.
Read 15 tweets
28 Dec 20
From luxury cars to personalized shotguns, NFL quarterbacks & running backs get creative when taking care of their offensive linemen.

Here are 5 of my favorite gifts ever.

Time for a thread 👇👇👇
1) After the Patriots’ 2007 season — a campaign which ended with a 16-0 regular-season record before losing in Super Bowl XLII — Tom Brady gifted each of his 5 starting linemen brand new Audi Q7 SUVs.

The cost?

Valued at ~$40,000 each, the generous gift was worth about $200,000
2) After the 2012 season, which saw Adrian Peterson rush or 2,097 yards — the 2nd-most in NFL history — the Vikings RB gave his linemen a Minnesota-Esque gift.

What was it?

Personalized Arctic Cat Snowmobiles.

At more than $8,000 each, the gift cost Peterson $40,000+ in total.
Read 8 tweets
23 Dec 20
Peloton currently has over 3 million global members.

Their long-term goal?

100 million.

While most laugh, I actually think it's possible.

Time for a thread 👇👇👇
1) Since being founded by John Foley in 2012, Peloton has dominated the multi-year transition to at-home fitness.

The fitness equipment & media company has over 3 million members currently, but how do they get to 100 million?

Let's run through it…
2) First off, existing Peloton subscribers aren't going anywhere.

Here's a wild stat:

The average Peloton user is working out almost 21x per month, which is ~2x more often than they were in 2019.

The pandemic certainly helps, but don't forget:

Addictions are hard to break.
Read 16 tweets
18 Dec 20
Two brothers teamed up with Wall Street to create the next great major US professional sports league.

Time for a thread 👇👇👇
1) First, some history...

Despite lacrosse being North America's oldest team sport—played by Native Americans throughout the 1400s—the US never developed a legitimate professional league.

That changed in 1999 when Jake Steinfeld, Dave Morrow & Tim Robertson founded the MLL.
2) Founded in 1999, Major League Lacrosse became the 1st outdoor professional lacrosse league.

The only problem?

Despite a decade straight of rising attendance—occasionally drawing 10,000+ fans—players weren't making any money.

The average MLL player made ~$10,000 annually.
Read 16 tweets
17 Dec 20
Giannis Antetokounmpo signed a $228 million dollar extension with the Milwaukee Bucks yesterday — the richest contract in NBA history.

The craziest part?

It was a bargain.

Time for a thread 👇👇👇
1) First, some history...

Giannis Antetokounmpo was born in Athens, Greece, shortly after his parents immigrated from Nigeria in search of a better life.

But as immigrants situated in a small town with a floundering economy, Giannis and his brothers had a rough childhood.
2) As a child, with his parents unable to find consistent work due to their immigration status, Giannis had to help provide for the family.

How?

Giannis & his brothers spent hours each day selling watches & CDs in the streets of Athens.

"I was good at it. I didn't give up.”
Read 17 tweets

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