LeBron James And David Beckham talking soccer
Yesterday, James confirmed that he is considering joining David Beckham as an investor in an expansion Major League Soccer team in Miami. The most recent MLS team to change hands were the Columbus Crew, sold by the Hunt Sports Group for $68 million in August. But Beckham has the right to buy an expansion MLS team for just $25 million as part of his previous deal to play for the Los Angeles Galaxy.
An investment in a Miami expansion team at a $25 million valuation would mean James is getting a big discount, just like Buffet has with some of his investments. Also, all three MLS television deals–NBC, ESPN and Univision–expire at the end of 2014 and given the competition for live sports programming the league will reap considerably more than the $28 million a year it currently averages from the three networks.
If he scores with Beckham it will be the second keen investment in sports by James. In 2011, James became an investor in Liverpool, among the most storied soccer teams in Europe, as part of a marketing agreement with Fenway Sports Group. It would seem James has done quite well with his stake in Liverpool. FSG paid $476 million for the team in 2010 and this April we valued Liverpool at $651 million. The boost in value has been in large part due to the team’s recent success singing new sponsorship deals.
Although MLS has bombed once in Miami, the star power of James and Beckham, coupled with the league’s next television deal, should make the next incarnation in Miami a winning investment, especially given the discounted expansion fee.
Bend it like Beckham. But invest it like Buffet.