After the Los Angeles Galaxy clinched their MLS-record 15th postseason berth on Sunday at home against San Jose, players could relax in their new Herbalife lounge, sipping Herbalife smoothies, before slipping into their Herbalife jerseys, perks of the team's landmark 10-year, $44 million sponsorship deal with the L.A.-based nutrition company.
There are few recent causes for celebration around Herbalife's headquarters though. A coalition of Latino and African-American civil rights leaders held a press conference outside California Attorney General Kamala Harris's L.A. office last Friday, calling on her to investigate the company for what they claim are deceptive and predatory business practices targeting minorities. The press conference came a week after a federal judge refused to dismiss a lawsuit claiming that Herbalife is essentially a pyramid scheme. Herbalife also faces scrutiny over product safety after an August New York Times story revealed that the company's best-selling Formula 1 shake had been contaminated with metal. An Herbalife spokesman called the Times story "misleading" and explained that after a new facility opened in 2010, "Herbalife's quality control systems worked as designed in detecting problems with new equipment," and that "the few affected products were detected and destroyed."
Herbalife posted $4.1 billion in net sales in 2012, yet admits that 88% of the people it recruited to sell its products received no payments from the company. Latinos make up as much as 80% of the company's sales force, according to the League of United Latin American Citizens (LULAC), and since roughly 30% of MLS fans are Hispanic, it's easy to see why soccer fans are a key demographic for Herbalife.
The Galaxy-Herbalife relationship begs a larger question: What—if any—responsibility do teams and athletes have to fans when choosing a sponsor? For Brent Wilkes, executive director of LULAC, the ethical choice for a team is clear: "They shouldn't take money from a company that's going to be basically harming their fans," he says. "They should know how bad the reputation of this company is."
October 28, 2013
Herbalife spokesman Julian Cacchioli dismissed the allegations, saying, "We continue to have great relationships with the teams and athletes we sponsor."
A Galaxy spokesman said the team looks "forward to developing its relationship with Herbalife" and noted that the duo have contributed to fitness and nutrition programs for kids as part of their deal.
In other words, for the foreseeable future, the team's coffers—and blenders—runneth over.
A study in the Oct. 7 issue of Pediatrics, entitled "Athlete Endorsements in Food Marketing," assigned scores to athletes based on the amount they made off food and beverage endorsements (shown below) and how unhealthful those products were (based on data from 2010). Starting with the biggest offender, they were:
|Dale Earnhardt Jr.||$6.0|