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


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.

“Overweight” Costa comes to Mourinho’s defense

Diego Costa, Chelsea FC
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Diego Costa says he and his Chelsea teammates are to blame for Chelsea’s horrid start to the 2015-16 Premier League season.

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Speaking Thursday, during a bit of downtime over the current international break (Costa was left out of Vicente del Bosque’s squad for Spain’s final two EURO 2016 qualifiers this week), Costa placed the majority of blame at the feet of the entire team, but went on to most harshly critique himself for coming into the season unfocused and “overweight.”

Costa, on his lack of fitness and form to begin the season — quotes from the Guardian:

“We know we’re not in the form we were supposed to be at the beginning of the season. We need to blame the players because we came back from holiday very confident, thinking we could go back into how it was last season, and then realized the team was already in a bad situation.

“I’m going to be very honest: maybe a few weeks ago, five or six weeks ago, I was not on top of my game. At least physically. We talk within the players and we know that, maybe at the beginning, we were not 100 percent as we were supposed to be when we got here. I got injured at the end of last season and then I went on holiday. Maybe I got out of my diet and, when I came back, I was not the way I was supposed to be. I was a little bit overweight. That affected my game. You can be selfish and blame it on the manager but I’m not going to do that. I’m responsible 100%, and so are the other guys.

Given that Chelsea manager Jose Mourinho said on Thursday he doesn’t quite know what’s wrong with the defending Premier League champions, hearing someone — anyone — speak up and explain the club’s worst start to a season in 37 years will surely be a welcome sound to any Blues supporter’s ears.

[ MORE: Liverpool appoint Klopp as manager | Allardyce to Sunderland? ]

Costa, who is eligible to return from suspension next weekend when Aston Villa visit Stamford Bridge, has scored just one goal in league play this season (six appearances) after scoring 20 in 26 games last season.

Sam Allardyce to open talks with Sunderland

Sam Allardyce, West Ham United FC
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Now that Liverpool have selected and named their new manager, it appears Sunderland are finally ready to move forward with their own managerial search. (That’s clearly a joke, because it implies Liverpool and Sunderland ever duke it out for the same managerial candidate.)

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Anyway, the Black Cats will have to hire someone to replace the recently-departed Dick Advocaat at some point. We all knew that, despite the fact he’s probably earned a shot at that level, Bob Bradley was never really going to be considered for the job. With that in mind, if you’re not going to endear yourself to the entire United States of America with this hire, you might as well go for the best unemployed manager who’ll actually consider your approach.

That’s what Sunderland chairman Ellis Short appears to have done, as it was reported Thursday that despite an initial reluctance from Sam Allardyce — let’s be honest, he actually was holding out hope for the Liverpool job — the 60-year-old most recently in charge of West Ham United was willing and ready to enter into negotiations with the northeastern club.

One of the major sticking points during Sunderland’s courting of Allardyce is expected to be his demand for autonomy in the transfer market as well as a sizable transfer budget to sign his own players during the January window.

[ MORE: Advocaat: Sunderland squad too thin, chairman to blame ]

Allardyce seems like the no. 1 guy you’d like to bring in to steady a capsized ship — cough Sunderland cough — in any situation. Not only does he have a successful track record in the Premier League, but he’s the kind of no-nonsense leader a club like Sunderland so desperately needs as they find themselves in yet another relegation battle just eight games into the new season.

Short hopes to have Allardyce signed, sealed and delivered when the Premier League returns to action next weekend. In that event, Allardyce’s first game in charge of Sunderland would be a trip to West Bromwich Albion. His first home fixture? Home to Tyne-Wear derby rivals Newcastle United, a club whose boisterous fanbase still holds a great deal of disdain for Big Sam. Sometimes the football gods really are looking out for us.