David Beckham To Earn Huge Windfall From New York's MLS Expansion

by Andrew Head on May 23, 2013

Recently retired David Beckham is going to score big time with Manchester City and the New York Yankees bringing Major League Soccer to New York City for the 2015 season by buying an expansion team for $100 million.

LA Galaxy football star David Beckham eyes the ball during the warming up session prior to an exhibition match against the Indonesia Selection team in Jakarta on November 30, 2011. David Beckham led LA Galaxy to a 1-0 win over the Indonesian All Stars on November 30, in a scarcely filled Jakarta stadium (Image credit: AFP/Getty Images via @daylife). 

As part of his deal with MLS when he played for the Los Angeles Galaxy, Beckham was given the right to buy an MLS expansion team for $25 million. The league has confirmed that Beckham has been having discussions with MLS recently about doing just that. Grabbing an MLS team for $25 million would be a huge windfall for the 38-year old Beckham.

As the table of MLS expansion fees below illustrates, that was a reasonable price six years ago. But MLS team values have increased at an 18% compound annual rate since 1995. Sure, the $100 million figure is inflated in the sense that New York is the biggest market and Manchester City owner Sheik Mansour will also be leveraging his English soccer team’s brand in the Big Apple AAPL +1.64%. And the Yankees, via their ownership in stadium operator Legends Hospitality, will get additional value from being an investor in New York FC.

But even a $70 million fair market valuation for Beckham’s expansion team would be a handsome reward for all he did for MLS.