Inside David Beckham's hidden contract clause that proved to be worth $500m

06 January 2023 , 16:20

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David Beckham joined LA Galaxy in 2007

Major League Soccer may be booming in 2023, but that wasn't the case when David Beckham signed he seemingly modest contract with Los Angeles Galaxy back in 2007.

Eyebrows were raised when Beckham took a huge wage cut to join the American side, in a league that was only founded back in 1993. Beckham joined the Galaxy from Real Madrid after winning La Liga back in 2007, but the then 31-year-old saw his wages slashed by 70 percent.

But it's clear that Beckham was thinking long-term, and although the MLS was looked down upon by many back then, the former Manchester United star saw gold ready and waiting. Beckham even managed to negotiate some crazy clauses into his contract, ones that would see him make $500million (£420m) further down the line.

In the present day, moving to play in MLS is the fashionable move towards the end of an established career. Gareth Bale is the latest star to grace American soil, and Steven Gerrard, Zlatan Ibrahimovic, Kaka and Gonzalo Higuain also did the same during their careers.

But Beckham paved the way of today, and helped develop the league immensely. The former Galaxy star now has a franchise of his own, something that was pre-agreed for a bargain price when signing.

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Sport and business entrepreneur Joe Pompliano took a look at Beckham's contract agreement with Galaxy back in 2007, and it proves just how savvy the former footballer was during his career. Beckham spent five years in Los Angeles, and lofted two MLS Cups, but he's reaped even more of the benefits since retiring.

Beckham may have taken a hefty salary reduction, but he was able to negotiate a cut of all team revenue as part of his contract. This included literally everything, from tickets and sponsorships, to food and drink sold at the games.

Beckham took a 70 percent wage cut - but made way more

With the immense attraction that Beckham brought to Galaxy, this saw his earnings increase every week. When factoring in his salary mixed with the revenue share negotiated, Beckham made $255m (£215m) during his five years with Galaxy.

Salaries may be getting ridiculous in 2023, but back then the $50m (£21.5m) Beckham was making annually made him the highest earning player in the world - not bad for someone that took a 70 percent wage cut. But Beckham's best piece of negotiating was yet to be utilised.

Beckham negotiated an agreement that would see him eligible to purchase an MLS franchise for just $25m (£21m) when retiring, and that's exactly what he did when Inter Miami was later founded. This genius negotiation has more than paid off, as in 2023 the average MLS franchise is valued at $582m (£490m).

Beckham has made a fortune on Inter Miami (Michael Reaves/Getty Images)

It's likely that Beckham's Miami franchise is worth more, and stock continues to rise as MLS continues to grow in popularity. Attendance figures are at an all-time high, and Apple have just taken over as the primary broadcasters of the league on a 10-year deal.

It may have been a risk for Beckham back then, but he trusted his instinct when the opportunity presented itself. Pompliano gave his backing for his decision, as he said: "In the end, the numbers don't lie.

"David Beckham took a huge risk and was rewarded by turning his $6.5 million annual MLS salary into more than $500 million. But MLS also benefited — attendance, TV rights, and valuations are all up big. That's a win-win for everyone."

Joseph McBride