Do shirt sales really pay for transfers?

A thing that is often said of big football transfers is that the club will recoup the transfer fee in shirt sales alone, particularly when it involves someone famous like David Beckham to Real Madrid or for more recent examples Lionel Messi to PSG and Cristiano Ronaldo to Manchester United.

It makes sense doesn’t it? Now everyone wants to buy a PSG shirt with Lionel Messi on the back and so naturally PSG can expect to sell hundreds and thousands of Messi shirts and this of course results in increased profits but it it not as simple as it seems on paper.

Although these transfers do have a big impact on shirt sales the financial benefits to the club are an illusion.

When Neymar joined PSG in 2017 his new club sold 120,000 shirts in the first month after his arrival which was a 75% increase on the previous year and an awful lot of profit. But although in this example it sounds like PSG should be rolling in cash from one month of shirt sales alone in reality they’d already mostly made their money when agreeing a kit deal with a manufacturer, in this case Nike.

Generally speaking the value of a kit deal reflects the guaranteed portion of a contract so when it’s said that a manufacturer like Nike or Adidas is paying £30m pounds per season for a club’s kit what that means is that they are paying for the right to produce and licence the kit.

Another part of this contract which is not often disclosed deals with the split in revenue made from the actual shirt sales, which tends to be ratioed heavily in the manufacturer’s favour, most often in the 80%-20% and it works in this way because both parties get what they want.

Man City will need to sell an unprecedented number of jerseys to pay for Grealish.

Football clubs like the way that theses kit deals work because it means they can count on guaranteed money which allows them to accurately estimate their yearly revenue and budget accordingly. Kit manufacturers are willing to pay these guarantees because they can then use their vast global distribution networks to make a return on their investment.

So everybody wins – or so you might think.

When Adidas became Manchester United’s kit supplier for the start of the 2015-16 season they agreed a 10-year deal worth £75m per season with chief executive Herbert Hainer estimating that the deal could be worth £1.5 billion to the brand over that period.

So in this case Man United get a guaranteed £750m over 10-years, provided that they qualify for the Champions League, while Adidas stand to make double that if their predictions are accurate.

For an example of how a footballer’s name impacts shirt sales specifically we can look at Cristiano Ronaldo’s move to Juventus in 2018. According to a report published that year by Business Insider in the 24 hours after Ronaldo completed his transfer Juventus sold 520,000 shirts with his name on the back. They also added 1 million new Instagram followers and their share price increased by 40%. So this roaring trade in shirt sales was said to be worth over £50m which meant it could be described as almost half of his transfer fee.

Although in literal terms that was true the value to Juventus was actually less like £50m and more £5m going to show that actually Juventus didn’t make half of their money back from shirt sales after all instead they essentially made 5% back.

In fact in order for a club to cover the cost of a transfer or even a player’s wages over a lifetime of his contract the sales would have to be astronomical and unprecedented.

Manchester City would need to sell at least 6.6 million Jack Grealish shirts to offset his move from Aston Villa but in 2018-19 over an entire season they only sold 1.1 million shirts worldwide.

So to summarise, the idea that these clubs might make money back from big transfers through shirt sales alone is not realistic.

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