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A little bit of trouble stirring in L.A. Galaxy land

Dec 21, 2012, 2:26 PM EDT

Galaxy jersey

Admittedly, what I know about business and high-level money management, I could put into a 140-character Twitter post.

And probably still have room left for some wisenheimer hashtag.

But … I know this cannot be good news.

It cannot be good news when your major sponsor is called a pyramid scheme by a leading hedge fund manager. So it goes this morning with the Los Angeles Galaxy and Herbalife, who have combined to sell David Beckham shirts the world over.

Billionaire Bill Ackman isn’t just saying the nutritional products company is a pyramid scheme, he’s on a campaign to make people believe it.

This won’t be any kind of immediate trouble for the two-time defending MLS Cup champion. But it could complicate AEG’s plans to sell the Galaxy and the Home Depot Center.

And who knows whether that might somehow prevent Beckham from becoming part owner, if that was ever in his plans?

  1. mkbryant3 - Dec 21, 2012 at 2:38 PM

    This is just wrong. I’m a billionaire with a huge short position in a stock (he’s borrowed about 2/3′s of the available stock for the short) and I have power and influence. So, I then yell to everyone how said stock is a pyramid scheme. Voila! Stock is down 20% and I’m sitting pretty. Aren’t there laws against this kind of thing? Evidently not.

    http://blogs.wsj.com/corporate-intelligence/2012/12/20/bill-ackman-isnt-leading-the-herbalife-shorters-he-is-the-herbalife-shorters/

  2. geojock - Dec 21, 2012 at 2:39 PM

    How long is the sponsorship deal?

  3. drchale - Dec 21, 2012 at 2:59 PM

    I think it troubles the Galaxy a little bit, but most people knew Herbalife was “pyramid-schemish” already. San Jose and Amway had a similar situation. That info hasn’t really changed in anyone’s mind.

    On the business side, however, I’m also pretty sure that the Galaxy/AEG have an out in their sponsorship deal with Herbalife. If Herbalife tanks or gets in legal trouble, I would imagine that AEG has some sort of language in the contract that allows them to walk away from the deal.

    And if that happens, corporations will be lining up to give AEG money. It’ll hurt LA about as much as AIG hurt Manchester United (answer: none).

  4. dfstell - Dec 21, 2012 at 4:40 PM

    This just doesn’t seem like that big of a deal to me. Like someone said, Amway is a pyramid scheme. So is Mary Kay. Plus, as long as the check clears, I can’t imagine it hurts the Galaxy too much. And, if they don’t pay…..the Galaxy get to go out on the market and negotiate a new, better contract with someone.

  5. dalucks - Dec 21, 2012 at 6:15 PM

    If you think about it, corporate america is a pyramid scheme. Some would consider insurance companies a scheme or scam. What this article is talking about is a whole lot of nothing.

  6. futbolhistorian - Dec 21, 2012 at 7:10 PM

    Someone calling Herbalife a pyramid scheme is like someone saying A-Rod is a phony. Really? No kidding? Well, I’m glad Bill Ackman was able to enlighten us.

  7. kappy32 - Dec 22, 2012 at 3:18 AM

    This is why I don’t believe it is smart for teams to sell naming rights to their products, especially their uniforms. Putting the name of your sponsor on your jersey is for little league baseball, not professional soccer. Now, all the DB jerseys sold during his tenure will be worthless & embarrassing to wear. Do you guys remember the flack the Astros got when news broke about Enron? They sold their stadium naming rights to Enron, naming their new park “Enron Field,” and the were the butt end of Enron jokes for years.

    • charliej11 - Dec 28, 2012 at 8:08 AM

      Yeah I will never get why fans WANT sponsored jerseys very Mickey Mouse.

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