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Herbalife strikes $44m 10-year mega-deal with LA Galaxy

By Elaine Watson , 19-Mar-2012
Last updated on 19-Mar-2012 at 15:34 GMT2012-03-19T15:34:42Z

Under the $44m, 10-year deal, Herbalife will continue as the official presenting sponsor and jersey sponsor of the Galaxy.
Under the $44m, 10-year deal, Herbalife will continue as the official presenting sponsor and jersey sponsor of the Galaxy.

Direct selling nutritional supplement giant Herbalife has struck the largest sponsorship agreement for a major league soccer (MLS) club in league history with a $44m, 10-year deal with MLS champion LA Galaxy.

Under the 10-year extension to their existing agreement, Herbalife – which first teamed up with the club in 2005 - will continue as the official presenting sponsor and jersey sponsor of the Galaxy.

The David Beckham effect

Herbalife, which launched the new Herbalife 24 sports nutrition range last summer, will remain the Galaxy’s exclusive nutrition partner, with the entire line of the Herbalife products available to the club’s players and coaching staff, said chief executive Michael Johnson.

“We continue to believe in the global appeal of the club, and the sport of soccer, to promote a healthy, active life. LA Galaxy has created much excitement for the sport among soccer fans and among our independent distributors around the world.”

Anschutz Entertainment Group boss Tim Leiweke added: “Herbalife bet on the Galaxy six years ago and now the MLS has exploded in popularity and growth.”

As part of the deal, the partners have agreed to spend $2.5m on community-based children's charity projects, including a joint program benefitting Children's Institute Inc., which is to receive a $1m donation to support fitness and nutrition programs at a new facility planned for Watts.

Herbalife24

Speaking on a conference call with analysts to discuss Herbalife’s full year results last month, Johnson said the Herbalife24 range was attracting a new breed of distributors and consumers to Herbalife, which is best known for its weight management products.

 “Herbalife24 is attracting a younger distributor to us who isn’t necessarily a weight loss distributor. It is an opportunity to build new and younger distributors but will work across all of our distribution base.

“It’s a fabulous thing to see a younger more fit group coming in, not just concerned with weight loss, but concerned with total nutrition and fitness nutrition.

“Now we are seeing a new generation of Herbalife distributors.”

Q4 and FY 2011 results breakdown

In the three months to December 31, 2011, net income rose 22.1% to $105.4m, while group net sales increased 20% and volume growth topped 23%.

For the full year 2011, Herbalife reported net sales of $3.5bn, up 26% on 2010.  Adjusted net income surged 35% to $413.3m.

 

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