Beckham insures himself for £100m

David Beckham, the world's most iconic footballer, has taken out the biggest personal insurance policy in sporting history, The Times can reveal. The mind-blowing new £100 million deal effectively doubles the value of his previous liability and is understood to be rivalled only by a handful of leading figures from the American entertainment industry.

Mariah Carey and Jennifer Lopez, the singer-actresses, are said to have insured their bodies for $1 billion each in recent years, although the actual sums are thought to be much closer to the cost of Beckham’s cover.

Beckham’s insurance policy — unprecedented in Britain — is so large that the costs have been spread over several companies, although one main insurer is understood to have borne the brunt. The cost of the total premium is a closely guarded secret, but even Beckham’s extra payments just to increase his cover are believed to run into many hundreds of thousands.

That Beckham has been able to command such cover flies in the face of claims that the loss of the England captaincy after the World Cup finals in Germany in the summer and the player’s subsequent axing from the national team would damage his global appeal and standing.

The decision to increase his cover has been taken now primarily because, with Beckham’s contract at Real Madrid expiring at the end of the season and the player keeping his options open amid interest from a number of top European clubs, the former England captain was keen to safeguard against the prospect of a career-threatening injury that could have serious repercussions as far as his earning potential is concerned.

It also reflects Beckham’s belief that, at 31, he is capable of excelling at the highest level for several years yet.

If Beckham were to suffer a serious injury on the field, Real would be required to pay out only the remaining six months of his £100,000-a-week deal, but, more significantly, the prospect of the player securing another lucrative contract, either at the Bernabéu or another club, would be severely reduced.

Real are prepared to offer Beckham a new two-year deal — on similar money to which he earns now — that will tie him to the Spanish club until the end of the 2008-09 season, but the midfield player is understood to want assurances that he will figure in the plans of Fabio Capello, the coach, before agreeing to sign.

The situation is also complicated by more than 15 clubs from across Europe, including AC Milan, Inter Milan and Juventus and Tottenham Hotspur, inquiring about Beckham’s availability.

Closely advised by Deloitte Touche, his accountant, and Lee & Thompson Solicitors, his lawyer, Beckham’s new insurance policy covers him for far more than injury on the field. Beckham is covered in the event that he suffers any disfigurement — unsurprising, given that his iconic status and commercial deals owe much to his looks — or serious illness. It is unclear whether the policy includes kidnap and ransom protection.

However, the policy dictates that Beckham will not be covered in the event that he is injured while partaking in high-risk or adventure sports, such as surfing or rock climbing. Under the terms of the policy, Beckham can also decide whether to compensate his club in the event that he suffers a serious injury while playing.

Beckham’s gross income last year declined by 10 per cent from, £17.3 million the year before to £15.5 million, although he remains the world’s best-paid footballer by a wide margin. The latest estimates value him and his wife, Victoria, at £87 million.

Turnover at Footwork Productions, Beckham’s company, would have been £1 million higher had he not made a donation to his two David Beckham Academies in London and Los Angeles, which are expected to become a focus for him after retirement from playing.

Indeed, Beckham’s merchandising comfortably exceeds his salary at Real, who pay him a reputed £4 million after tax, and is thought to be why his insurers were happy to approve such a mammoth personal policy.

Beckham’s boot deal with adidas is worth an estimated £3 million a year, but it is dwarfed by the royalties he receives from the sports manufacturer. In addition, there is the three-year, £7.5 million deal he signed with Motorola in June this year, a long-standing contract with Pepsi worth about £2 million a year and an equally lucrative three-year deal with Gillette that was signed in 2004. Brand Beckham Ltd, a joint venture with Victoria, accounts for his Coty fragrance, which has proved popular since its launch near the end of last year.

Sponsorship deals with Vodafone, Marks & Spencer and Police recently came to an end, by mutual agreement, as the star, advised by 19 Entertainment, restructured his deals to concentrate on global agreements.

Bill Hubbard, the president and chief executive officer of HHC Speciality Underwriters, a leading American sports insurer, said: “The largest team contract is Alex Rodriguez (the New York Yankees third baseman). The ten-year, $250 million deal he signed remains the largest sports contract in the US.

“With the guaranteed contract, which Major League Baseball and National Basketball Association players have, they are going to get the money whether they are playing or not, so the insurance is bought by the team because they have contractual obligation to pay the player.

“Typically, players will look to buy insurance themselves in the final years of a contract to protect their future value, in case they get injured and cannot negotiate a new contract. They would come to us and we would insure based on an agreed future value, but I can say that we have never agreed £100 million.”

On a different planet

David Beckham is by no means alone – insuring one’s body has long been a popular trend among celebrities. Lloyd’s of London, the world’s leading specialist insurance market, has been insuring its clients since 1688, although the origins of celebrity insurance are thought to date back to the 1920s, when Ben Turpin, a silent movie star famous for his crossed eyes, took out a $20,000 policy against them uncrossing. Marlene Dietrich, the actress, insured her voice for $1 million while “celebrity leg insurance” took off the moment Betty Grable, the actress, singer and dancer, insured her pins for the same figure. Beckham’s insurance policy, however, dwarfs even those taken out to safeguard spaceships and the Olympic Games

£100m David Beckham
£87m Athens Olympics 
£50m Spaceshipone
£25m Michael Flatley’s legs
£4m Ken Dodd’s teeth
£3.5m Bruce Springsteen’s voice
£1.15m Heidi Klum’s legs
$1m Marlene Dietrich’s voice
$1m Betty Grable’s legs
£0.5m Anthony Worrall-Thompson’s mouth
£0.35m Dolly Parton’s breasts
£0.2m Merv Hughes’moustache 
$20,000 Ben Turpin’s eyes 

Source: The Times