By Daniel Geey – @FootballLaw
When David Beckham moved to Real Madrid, this seemed to herald the era of news stories about increases in shirt sales covering the transfer fee and wages for a new player. More than 1 million Real Madrid shirts were reportedly sold in the first year of Beckham’s four-year stay at the Bernabéu. The same narrative is regurgitated whenever a big name moves – Pogba to Manchester United, Ronaldo to Juve or Neymar to PSG.
The headline values that manufacturers attach to shirt deals for elite clubs can be very large. It was reported that the latest Manchester United deal with Adidas was worth £750m over a 10-year period. Adidas forecast at the outset that they believed United shirt sales would reach £1.5 billion over the length of the deal.
Indeed, Chelsea are said to have ended their current deal with Adidas early (after paying a hefty termination fee of around £40m) in order to secure a new deal with Nike, worth £60m per year. They did the same in 2005, agreeing an early end to their then agreement with Umbro by paying £25m to sign with Adidas.
Shirt manufacturers will pay such astronomical figures only if they believe they are going to profit from the deal. People suggesting that Manchester United would make an additional £40m in shirt sales revenues after signing Zlatan or Pogba seem wide of the mark for the following reason. Kit manufacturers usually take 80–90% of all revenue from shirt sales. Clubs in return receive large, ‘up-front’ payments from their kit manufacturer. At best, the club can earn 20% of all net sales, though for many large deals, such royalty payments to a club only kick in only once a large number of sales have already been made – say, 2 million shirt sales.
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