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

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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.

U.S. Open Cup roundup: Poku lifts Miami; Red Bulls, Cincy win on PKs

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While MLS represents the majority of the remaining clubs in this year’s U.S. Open Cup, one side continues to defy the odds.

[ MORE: Minnesota United adds Hearts midfielder Sam Nicholson ]

Miami FC reached their first quarterfinal in club history after knocking off Atlanta United late on Wednesday, behind a goal and an assist from Kwadwo Poku. The victory for Miami sets up a date with FC Cincinnati — who pulled off an unbelievable shootout win against the Chicago Fire.

Meanwhile, the New York Red Bulls and New England Revolution both advanced on the night with wins over the Philadelphia Union and D.C. United, respectively. The Red Bulls and Revs will meet in the final eight as well.

Sporting KC kept its hope of hoisting a fourth U.S. Open Cup title alive on Wednesday with a 2-0 win over the Houston Dynamo. The 2015 winners will take on FC Dallas — who defeated the Colorado Rapids on Tuesday night.

Here are all the results from tonight’s Open Cup action.

Houston Dynamo 0-2 Sporting KC
New England Revolution 2-1 D.C. United
Miami FC 3-2 Atlanta United
New York Red Bulls 1-1 (5-3 on PKs) Philadelphia Union
FC Cincinnati 0-0 (3-1 on PKs) Chicago Fire

Late action (10:30 p.m. ET kick off)

San Jose Earthquakes vs. Seattle Sounders
LA Galaxy vs. Sacramento Republic

Report: City Football Group set to expand outreach with Girona deal

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City Football Group appears on the verge of adding to its global outreach, and it’s next destination looks to be in Spain.

[ MORE: Are Southampton’s days of selling behind the club? ]

The group of investors, which are known for controlling Premier League side Manchester City, are reportedly nearing a deal to purchase a partial stake in Spanish club Girona — which is set to make its La Liga debut in 2017/18.

CFG is said to be gaining a near “50 percent” stake in the club, with the rest of the club owned by Media Base, a company owned by Pep Guardiola‘s brother, Pere.

Over recent years, CFG has vastly expanded its ownership outreach and currently has a stake in five clubs around the world, with Girona set to be the sixth.

MLS side New York City FC, Australian A-League side Melbourne City FC, Japan’s Yokohama F. Marinos and Club Atletico Torque in Uruguay are all part of the CFG enterprise, alongside Man City.

New York Red Bulls ink goalkeeper Luis Robles to new deal

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The “Iron Man” will keep up his amazing journey with the New York Red Bulls, after signing a new deal with the club on Wednesday.

[ MORE: Wesley Sneijder on verge of joining Los Angeles FC ]

Goalkeeper Luis Robles has extended his contract with the reigning Eastern Conference champions, as the American continues to raise his consecutive starts streak, which stands at 157.

The terms of the deal were not disclosed in the club’s release.

Robles joined the Red Bulls back in 2012 after playing in Germany, and the shot-stopper hasn’t missed a start ever since.

Report: Minnesota United adds Hearts midfielder Sam Nicholson

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Minnesota United has had its shares of ups and down in its debut MLS season, but the Loons are on the verge making an exciting young signing.

[ MORE: Wesley Sneijder closing in on Los Angeles FC move ]

ESPN FC is reporting that Minnesota will sign Hearts winger Sam Nicholson from the Scottish Premier League on a deal that makes him a Loon until 2019.

The young attacker is expected to join the MLS side when the summer transfer window opens on July 10.

Nicholson, 22, has played with the Edinburgh side since his youth days, and made his senior debut with the club in 2013. During his time at Hearts, Nicholson scored 16 goals in all competitions for the team.

Last season, Nicholson missed 16 matches due to a significant knee injury.

According to the report, Scottish sides Rangers and Aberdeen were also among those interested in acquiring Nicholson, while English Championship clubs Bristol City and Barnsley also reached out about the attacker.