Why Shirt Sales Will Never Cover the Cost or Wages of a New Signing
It is a popular myth that still persists even now. A big club completes a marquee transfers and fans rejoice, not only at the arrival of a top player, but also over the financial smarts because the deal will pretty much pay for itself and other deals as a result of all the shirt sales that will follow.
Shirt sales figures are not specifically disclosed, although a German marketing firm calculated a few years ago that 1.75m Manchester United jerseys were sold on average each season between 2011 and 2016. Another estimate said that just shy of three million were sold in 2015/16.
Napkin maths will tell you that three million multiplied by around £60 per shirt is £180m.
A rumour did the rounds in 2016 alleging that Manchester United raked in £76m through shirt sales just in Zlatan Ibrahimovic’s first week at the club. The implication was that the club was already rolling in profit without Zlatan even kicking a ball. There were similar claims about recouping transfer fees when Cristiano Ronaldo joined Real Madrid and Juventus in 2009 and 2018 respectively.
Similar suggestions have done the rounds on social media again, amid the speculation over rising star Jadon Sancho's possible move to Manchester United.
The problem is that it really, really doesn’t work like that and it never will.
Clubs themselves do not see the vast majority of revenue raised by shirt sales. By the time the jerseys are on the shelves to be bought by fans, the clubs have already had their payday from Nike, adidas, Puma, or whoever it is they happen to be partnered with.
When adidas pay Manchester United £75m per year and Nike pay Liverpool a base rate of £30m per year, it effectively becomes a licensing agreement. The clubs are paid handsomely by the sportswear giants for the privilege of manufacturing and selling goods with their name and trademarks on.
After that, only around 10% or 15% of sales might go to the club in additional royalties. Depending on the exact details of the contract, some royalty payments might not even in kick in until certain sales target shave been reached and exceeded.
It seems obvious, but it is also important to understand that clubs are not the sole sellers of their merchandise, nor are the suppliers, which creates key distinctions between cost price, wholesale price and retail price.
Addressing the false notion that new signings could pay for their own transfer fee and wages through shirt sales alone, it is also necessary to understand that while having a particular player may help drive sales, there might not be a significant increase in overall sales - let alone profits.
If a club would sell a certain number of shirts anyway, with or without a particular marquee signing, it is only any incremental gain since the previous year that is relevant in this sense. A fan who bought a shirt with the new player’s name on it may have previously bought a different player’s shirt the season before and it therefore cannot be considered a ‘new’ sale.
A high-profile signing (and/or one with appeal in emerging markets) might account for a few million in additional revenue at most, a welcome bonus, but certainly nothing like enough to cover the costs of buying them in the first place.
It’s a nice idea, but sadly one that bears no truth.
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