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.

EURO 2016: Ireland shock Germany, Northern Ireland qualify

Shane Long, Ireland
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A recap of Thursday’s action in 2016 European Championship qualifying:

Ireland 1-0 Germany

Southampton striker Shane Long scored the goal that knocked off the defending world champions and pushed Ireland one step closer to next summer’s European Championship in France. Long, who entered the game in the 65th minute, latched onto Darren Randolph‘s ball over the top in the 70th minute, took one touch to settle and fired for the far post, beating Manuel Neuer for the game’s only goal.

With one game still to play, Ireland (18 points) sit third in Group D, level on points with Sunday’s opponent Poland. While the winner of Sunday’s clash could leapfrog Germany (19), they will more likely finish second in the group and qualify automatically. A draw on Sunday could still see both sides qualify automatically through the ranking of third-place finishers (the top third-place finishers from group play earns an automatic berth at EURO 2016).

Northern Ireland 3-1 Greece

Norther Ireland (20 points) topped Greece (3), 3-1 on Thursday to officially book their place at EURO 2016. Steven Davis scored twice and Josh Magennis added the third for Michael O’Neill’s side.

With one game still to play (Sunday, at Finland), Northern Ireland can finish no lower than second. A draw against Finland, or any points dropped by Romania (17) would see Northern Ireland finish top of Group F.

Portugal 1-0 Denmark

Joao Moutinho scored the only goal of the game to secure Portugal’s (18 points from just seven games) place at next summer’s tournament. The defeat sees Denmark remain second in Group I, a point ahead of third-place Albania, who lost to Serbia on Thursday. Having played all eight of their group games, Denmark can go no higher than 12 points, meaning they would fail to qualify if Albania beat Armenia on Sunday. A draw between Albania and Armenia would see Denmark qualify based on tiebreakers.

Elsewhere in EURO 2016 qualifying action

Group D

Scotland 2-2 Poland
Georgia 4-0 Gibraltar

Group F

Hungary 2-1 Faroe Islands
Romania 1-1 Finland

Group I

Albania 0-2 Serbia

Jurgen Klopp announced as new Liverpool manager

Jurgen Klopp, Liverpool FC
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Enough with the speculation and reports already, because it’s finally officially official: Jurgen Klopp has been appointed the newest manager of Liverpool Football Club, the Merseyside club announced on Thursday.

[ FOLLOW: All of PST’s PL coverage ]

Klopp will be unveiled to the world at an introductory press conference at Anfield on Friday.

According to early reports, Klopp’s three-year contract could pay him as much as $10 million per season.

[ QUOTE KING: Top 10 “Klopp-isms” from his time at Dortmund ]

The 48-year-old German has been out of work since stepping down at Bundesliga side Borussia Dortmund following a seventh-place finish to the 2014-15 season. Klopp’s seven seasons in charge of Dortmund weren’t without success and silverware, though, as he led Der BVB to back-to-back league titles in 2011 and 2012, a German Cup triumph in 2012 and a UEFA Champions League final appearance in 2013.

PST’s Joe Prince-Wright will be at Anfield on Friday for Klopp’s unveiling, so be sure to follow JPW on Twitter and check back to PST for wall-to-wall coverage of Klopp’s first press conference as Liverpool manager.