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Feb 6, 2009

Galaxy needs to drive a hard bargain for Beckham

The temptation will be overwhelming in the coming days to beat up on MLS, to toss it around like a little ragamuffin of a league.

But as l'affair Beckham plays out, the truth and consequence deserve a bit deeper contemplation.

This much does seem certain: Major League Soccer's dalliance with David Beckham, sometimes turbulent, flush with razzle-dazzle, unmatched in financial value and invariably entertaining for any number of reasons, seems to be nearing its end.

The pace of the drama now appears to be quickening and, while nothing has been signed, the dramatic move to AC Milan seems imminent. Don't be surprised if it becomes final soon -- just a hunch, based on conversations with some officials in Los Angeles and at MLS headquarters and on the overall tone emerging from the Home Depot Center.

It will represent a dramatic conclusion. Beckham is closing the MLS chapter on his storied career after just two years of a five-year deal. (He was actually a Galaxy midfielder for only 18 months, as he joined the team about six months after the January 2007 signing.)

His loan to Milan was revealed in late October. After weeks of speculation that the "temporary" tag surely would be removed, Beckham copped to the uncomfortable truth earlier this week: His time at the San Siro had been surprisingly reinvigorating, and he wished to remain in Italy.

So he's apparently dropping MLS like last year's cell phone model.

The recriminations and digestion of the bigger picture will unfold gradually. Debate will rage about whether the league got its money's worth from the world's most marketable midfielder. Bottom line, this whole thing was hardly a failed bit, as he certainly raised the league's profile in countless ways, which was the league's hope all along.

TV contracts have been signed since that epochal January day when the Beckham news broke. Sponsors have been added or re-signed. The always-important stadium initiative and expansion effort have marched confidently forward. Anyone who thinks Beckham's presence didn't add to the coffers in a myriad of ways isn't thinking in business terms -- which is certainly the right of every fan.

On the other hand, it would be difficult to deny that the Galaxy's meddling upper management sucked much of the joy from Beckham's MLS experience and played a huge role in his decision to ditch MLS. The team has been comically dysfunctional over the last three years; the Galaxy hasn't even made the playoffs in that time, an absolutely stunning consequence considering the league's forgiving postseason structure. So the question remains about whether Los Angeles and MLS failed to fully exploit Beckham's enormous presence.

League officials still aren't saying much. MLS spokesman Dan Courtemanche referred all queries to the L.A. Galaxy. But Galaxy officials, likely juggling a gamut of emotions, are curiously quiet, too. They are surely disappointed and a bit wounded in a spurned-lover sort of way, but there is surely some relief that the circus is finally pulling out of town.

If they had any confidence that Beckham was staying, Galaxy and league officials surely would be saying so -- as they did all those weeks when they truly believed the charms of sunny SoCal would lure Beckham back.

Coach Bruce Arena declined most interview requests, although he did talk to Fox Soccer Channel and to a writer for the L.A. Galaxy's Web site. There, he said, "Whatever happens, happens, and whatever concludes will be in the best interests of the Galaxy."

So, what will Los Angeles receive for Beckham? Remember, compensation in this case must account for far more than a player's value on the field. (Milan certainly isn't paying based on 5 goals and 12 assists over 30 MLS matches.) Rather, the league is severing ties with its poster boy of the past two years. That's why it is hard to see the Galaxy settling for anything too far south of $20 million, assuming the deal is for an outright purchase, rather than an extension of the current loan.

It almost certainly will crack the current MLS transfer record, $10 million for Jozy Altidore last spring.

Beckham's value may have been even greater but for that opt-out clause in his contract. It permits the illustrious midfielder to walk away at the end of this season, after completing three years of his lucrative five-year agreement. That provided Milan some leverage because Beckham could move free by this November.

But world soccer being what it is, and Milan being what it is, these things can't wait. So, effectively, the Italian giants are paying a fabulous price just to sign the midfielder in winter -- a man detractors sometimes disparagingly dub a "walking shaving cream commercial" -- eight months earlier.

So, who is making the important decisions? As of late Thursday afternoon, all negotiations with AC Milan were apparently being handled by Tim Leiweke, president of AEG, which owns the Galaxy. By the evening, MLS commissioner Don Garber became involved.

The guess here is that Leiweke set the price, followed by league stamp of approval. "Certainly, all these decisions are always a collaborative effort between the club and the league," MLS spokesman Dan Courtemanche said. "That's true whether the player is David Beckham, Maurice Edu, Clint Dempsey, Jozy Altidore or anyone else."

This is a case where Beckham's marketing value far exceeds his ability to tip the competitive balance. When Chelsea or Real Madrid purchases a player, the price is typically a financial valuation of talent. But that's not the case in Milan's purchase of the Galaxy's golden goose.

Beckham stuffs the stands. He adds tremendous value to Galaxy sponsorships. He significantly enhances the club's media profile locally and the league's nationally, and he's been instrumental in amplifying the value on TV contracts and expansion fees, now set at $40 million.

Ask yourself this: Would the Galaxy have gone on profitable tours to Australia and New Zealand over the last two years if No. 23 wasn't part of the program?

While Beckham's departure now seems a fait accompli, how it plays out remains less certain. There are three potential scenarios that could develop.

The most likely scenario is an outright Milan purchase. Or MLS and Milan could agree to extend the current loan until the end of AC Milan's current campaign. At that point, Beckham could return to the Home Depot Center with a little more than half a season remaining.

Or the Galaxy and Milan could extend the loan until the end of the 2009-10 Italian season. At that point, Beckham might be part of England's plans for South Africa 2010. After that, Beckham could merge back in with the Galaxy, picking up the last year of his five-year agreement.

In some ways for MLS, this could be the best thing to happen since dumping the draining force of Tampa Bay.

The arc of Beckham's influence was always going to be heavily weighted toward the front half of the deal. These things, inevitably, are born into diminishing returns. The big blast of publicity, the initial starburst of attendance, the flash-bang of jersey sales ... all these things were going to be eye-popping in Year 1 and then recede gradually. The big jump in MLS jersey sales, driven mostly by Beckham, happened between 2006 and his entrance in 2007. In that time, sales increased a whopping 700 percent.

In other words, the majority of the whirlwind has already been reaped.

Along those lines, this could be incredible news for the Galaxy from a competitive standpoint. This is a point that has yet to be discussed.

Under MLS rules, teams may use two-thirds of a transfer price as, essentially, a player-acquisition fund. The club's portion can be used, among other ways, to purchase players in the international markets or to buy down salaries.

Long story short, Bruce Arena could go shopping in a way that no other MLS manager has ever been able to. Yes, there would be challenges in folding players into the program rather late in the game. On the other hand, that kind of money would make most MLS coaches dizzy with delight.

Steve Davis is a Dallas-based freelance writer who covers MLS for ESPNsoccernet. He can be reached at BigTexSoccer@yahoo.com.

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