Can PSG Cover Messi's Expenses From Shirt Sales?
Paris Saint-Germain sent shockwaves across the football world when they brought Lionel Messi to the Parc des Princes. The Argentina captain, who was set to renew his contract with Barcelona, had to make a sudden move to the French capital after La Liga announced it was impossible for Barcelona to maintain their wage cap after handing Messi a new contract.
Lionel Messi waving at PSG fans after landing in Paris
Football fans and pundits applauded PSG for pulling off such an incredible move. Since Messi was out of contract at Barca, PSG didn’t have to pay a dime to Barca for the transfer. The club agreed to a two year deal with Messi, with a one-year extension option, that would cost the club around $41 million per year. It would make Messi the most expensive player in the world, surpassing Cristiano Ronaldo’s annual €31m ($36.3m) salary in Juventus.
Undoubtedly, Messi’s arrival will elevate PSG’s brand value to a whole new level. Estimates suggest PSG’s brand appeal will expand as much as 10%-20% globally because of the inclusion of the five-time Ballon d’Or winner in their roaster. So, the Ligue 1 giants can expect to recoup the money they are spending on Messi and then some. But, how much of that income will come through shirt sales?
Whenever a club signs a superstar we hear a common line from fans; ‘’the club will make the money back from shirt sales.’’ We heard the same thing when Cristiano Ronaldo signed for Juventus. After Messi was unveiled as a new PSG player, Piers Morgan put out a tweet claiming PSG will recover the cost from shirt sales only. Unsurprisingly, he is not the only one who has a similar line of thinking. Now the question is, is this true?
Juventus sold Cristiano Ronaldo shirts worth €70m within 24 hours of his signing
In reality, clubs can’t cover the transfer fee and wages of a player from shirt sales only. Clubs don’t get the whole shirt revenue; they only receive a portion of it. And the percentage differs across clubs. Most of the money goes to the shirt manufacturer. Nike, PSG’s kit partner, will enjoy the lion’s share of the shirt revenue generated by Messi. PSG will only get a 10% cut.
Why do the clubs agree to this? Because it’s part of the agreement they sign with the kit manufacturer. The jersey maker gets the larger slice of the piece when it comes to shirt sales. In return, the club receives a predetermined annual fee, apart from a tiny portion of the shirt revenue. Nike currently pays PSG €67 million per year, under a contract that runs till 2022.
The shirt sale commission usually ranges between 7.5% and 15%. Liverpool, however, is a glaring exception to this. Their current deal with Nike brings them 20% of the shirt sale revenue. That said, they receive a lower annual fee compared to PSG. The Merseyside outfit gets €35 million per year from the US sportswear company.
So, how much did PSG make from Lionel Messi’s shirt sales? The exact shirt sale figures are unknown. Some reports say that PSG shipped as many as 830,000 shirts in the first 24 hours of his arrival while some outlets reported numbers around 250,000 and 150,000. So, let’s take into account the most outrageous claim and do the math.
A PSG Lionel Messi shirt comes with a €157 price tag. If PSG did sell 830,000 shirts the first day, they would make €12.5 million. Sounds like a remarkable return indeed for the first day, but you need to consider that this trend will not hold in the next few days. The ones who have already bought the shirt will not come back for a new one this season. Plus, the euphoria of welcoming Messi in the airport played a vital role in selling such a ridiculous number of shirts in a single day.
You might argue that PSG has 45 million followers on Facebook alone. If only 10% of these people buy the shirt, PSG will make more than €70 million, which will not only cover Messi’s remuneration package but also put PSG in profit. Yes, on paper that’s a possibility. But, the odds of that actually happening is almost zero. Let’s explain why.
No other European club sold more shirts than Barcelona last season.
Most fans can’t afford official merchandise. Clubs like Manchester United, Barcelona, and Real Madrid have fans all around the globe. But, if you review their yearly shirt sale numbers, you would find out these clubs only sell around 3 million shirts per year. If you consider social media following, they have more than 70 million followers. So, why the shirt sale numbers are so low?
Outside their native countries, the clubs don’t sell a lot of official merchandise. Lack of official retailers, high price, and exorbitant international delivery charges-all these factors contribute to the poor official shirt sale figures overseas. Also, the availability of cheaper counterfeit shirts adversely affect the sales of official shirts.
Therefore, a realistic projection would foresee PSG selling around 2 million Lionel Messi shirts this season. If that happens, PSG would rake in €31.4 million. Again, it’s an impressive return, but it falls well short of the $41m (€35m) remuneration package PSG are giving to Messi. If you take account of the $30m signing bonus, the shirt sale revenue would seem even bleaker.
Although PSG won’t be able to offset Messi’s salary through shirt sales, it would be a very lucrative avenue of income for the French club. Moreover, Messi’s impact would draw more sponsorship deals. The Parisians will also get to renegotiate their existing deals with more authority since they have one of the most marketable sports personalities at their disposal now.
For the Ligue 1 as a whole, the benefits of Messi’s signing won’t be as enormous as it’s for PSG. However, the league can now expect more coverage around the world. Amazon, who have secured the Ligue 1 rights only a few months before Messi’s transfer, would be delighted to see the Argentina international playing at the competition as the audience numbers are guaranteed to jump.