Skip to content

Herbalife problem doesn’t look good for LA Galaxy, Major League Soccer

Mar 13, 2014, 4:31 PM EDT

Galaxy

Herbalife’s business model has always been a bit controversial. Late in 2012, billionaire investor Bill Ackman called their “multi-level marketing” model a pyramid scheme and proceeded to put his money where his mouth is. The Pershing Square hedge fund manager shorted the company’s stock with a $1 billion bet, contending the company was destined to go bust.

Yesterday was a big day for Ackman, with Herbalife stock closing down 7.4 percent after news the company is being investigated by the Federal Trade Commission. The term “pyramid scheme” is being thrown around.

Even if nothing comes of the investigation, this isn’t good news for Major League Soccer; or, more specifically, the LA Galaxy. The Cayman Islands-based company has been a long-time shirt sponsor of the four-time champions, with the partners’ latest 10-year, $44 million sponsorship deal only in its second year. But, as Bloomberg’s Kavitha Davidson explains, that sponsorship becomes a burden for both club and league if Herbalife’s perception goes in the tank:

This isn’t just any soccer club caught up in a potential fiscal fiasco – this is the face of the league. The Galaxy’s success has been a primary booster for the national and global MLS brand …

Herbalife is the official jersey sponsor of the Galaxy, who have several players on the list of the top-selling MLS jerseys. The partnership had only grown stronger in recent months, highlighted by the October launch of the “Be a Pro” Web series …

It would be a hard pill to swallow for both the Galaxy and MLS if these accusations ultimate prove to hold water.

That’s why the FTC’s involvement is so scary. Whereas Herbalife has always been surrounded by ifs, a federal investigation bolsters those hypotheticals.

Perhaps, as the company implies, the investigation could turn into a positive, allowing the brand to clear up any misconceptions about their model’s legality. Until then, though, both MLS and the Galaxy are stuck in the debate’s crossfire.

From Bloomberg:

“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace,” the Cayman Islands-based company said today in a statement. “We are confident that Herbalife is in compliance with all applicable laws and regulations.”

In the mean time, the league’s most recognizable franchise has a problem literally written across its chests. Should Herbalife go away, a brand as strong as the Galaxy’s would surely be able to replace it. In the interim, though, MLS and one of its marquee franchises will have to ride it out.

Latest Posts
  1. Vancouver Whitecaps 1-0 Colorado Rapids: Caps edge Rapids, clinch postseason birth

    Oct 26, 2014, 12:39 AM EDT

    carl_robinson AP

    The Vancouver Whitecaps did themselves well to clinch a late playoff birth, besting the Colorado Rapids, 1-0.

  2. Portland Timbers down FC Dallas, 2-0, to bolster playoff chances

    Oct 25, 2014, 11:44 PM EDT

    Diego Valeri's fifth goal of the season, his second game-winner in a row, gave Portland a 3-2 win in Montréal. (Credit: AP) AP

    The Timbers’ postseason aspirations are hanging in the balance, but this 2-0 win over FC Dallas has certainly put them in a nice spot.

  3. Lee Nguyen’s goal lifts Revs to 1-0 win over Toronto FC

    Oct 25, 2014, 10:31 PM EDT

    Doneil Henry Getty Images

    Final: New England Revolution 1, Toronto FC 0

  4. MLS revives interest in signing AS Roma defender Ashley Cole

    Oct 25, 2014, 9:49 PM EDT

    452343856-490294

    AS Roma defender Ashley Cole has drawn the interest of MLS teams once again.

  5. Ronaldo hails Van Gaal, says Dutchman will make United champions ‘very soon’

    Oct 25, 2014, 8:48 PM EDT

    Cristiano-Ronaldo-513245 Getty Images

    Cristiano Ronaldo praises manager Louis van Gaal and is convinced that the 63-year-old will lead Manchester United to its former glory.

  6. Premier League Saturday recap: West Ham stuns Manchester City, Sanchez braces Arsenal

    Oct 25, 2014, 7:23 PM EDT

    Britain Soccer Premier League AP

    Short recap and highlights of Saturday’s Round 9 Premier League matches.

  7. Premier League Sunday preview: Manchester United vs. Chelsea headlines

    Oct 25, 2014, 7:08 PM EDT

    Britain Soccer Premier League AP

    With three games on the slate, here’s what you can look forward to on Sunday.

  8. MLS Snapshot: Montreal Impact 1-1 DC United

    Oct 25, 2014, 6:18 PM EDT

    Marco Di Vaio, Patrice Bernier, AP

    Final: Montreal Impact 1, D.C. United 1

  9. Chicago Fire pleased with former Tottenham Hotspur Jaime O’Hara on trial

    Oct 25, 2014, 5:23 PM EDT

    ohara_1496113c Getty Images

    The Chicago Fire are seeking to bolster the strength of their roster, examining the possible signing of ex-Tottenham Hotspur midfielder Jaime O’Hara.

  10. Seattle 2-0 L.A. Galaxy: Pappa the hero again, Sounders win 1st Shield

    Oct 25, 2014, 4:55 PM EDT

    MLS Galaxy Sounders Soccer AP

    A sleepy game for over an hour, Seattle and L.A. used the last hour to stage a contest worthy of a trophy-winning event.

  11. Gerard Pique calls his handball ‘unintentional’ in El Clasico defeat

    Oct 25, 2014, 4:29 PM EDT

    Pique Getty Images

    Pique speaks of his handball in Barcelona’s 3-1 defeat to Real Madrid: “It was unintentional.”

  12. LIVE ON NBC: Scoreless half has Seattle 45 mins from Supporters Shield

    Oct 25, 2014, 3:47 PM EDT

    @lagalaxy @lagalaxy

    The L.A. Galaxy and Seattle Sounders are scoreless through 45 minutes at CenturyLink in Washington.

  13. Leeds United ax manager Darko Milanic after six games at the helm

    Oct 25, 2014, 3:30 PM EDT

    darko_3045587b Getty Images

    Leeds United have fired manager Darko Milanic after only 32 days leading the squad.

  14. Bundesliga wrap: Dortmund’s freefall continues, 9-goal thriller in Frankfurt

    Oct 25, 2014, 2:59 PM EDT

    FBL-GER-DORTMUND-HANOVER Getty Images

    Several fun games whet the appetite for a massive top of table Sunday tilt between Bayern Munich and Borussia Monchengladbach.

  15. Swansea City 2-0 Leicester City: Bony brace tames timid Foxes in Wales (video)

    Oct 25, 2014, 2:20 PM EDT

    Swansea City v Leicester City - Premier League Getty Images

    Wilfried Bony scored both goals for Swans, 2-0, who cruised to the win against the suddenly-struggling Foxes.

  16. Watch Live: Seattle Sounders vs. L.A. Galaxy (Lineups and Live Stream)

    Oct 25, 2014, 2:07 PM EDT

    Obafemi Martins, Robbie Rogers AP

    Will the Sounders handle the Galaxy and expectations to clinch home-field throughout the playoffs?

  17. Southampton manager Ronald Koeman: “It’s fantastic” to be in Premier League’s second place

    Oct 25, 2014, 1:54 PM EDT

    Southampton v Stoke City - Premier League Getty Images

    “Maybe they [Stoke] created two possibilities, not chances and that’s a great team effort,” Koeman said of his Saints.

  18. Real Madrid 3-1 Barcelona: Real win El Clasico, Suarez returns

    Oct 25, 2014, 1:47 PM EDT

    Pepe Pepe

    Despite going behind earlier, Real came roaring back to win the first El Clasico of 2014-15.

  19. WATCH: Bony and Sigurdsson team up for beauty versus Leicester on NBC

    Oct 25, 2014, 1:28 PM EDT

    Reading v Swansea City - Pre Season Friendly Getty Images

    Watch and enjoy, then follow the second half live on NBC and online via Live Extra.

Featured video

PST Extra: Can United beat Chelsea?