Sportswear manufacturers strike lucrative deals with the biggest football brands in the world, but what is in it for the clubs?
When it comes to marquee signings in football, the idea of a boost in shirt sales is often raised as a financial benefit associated.
It is usually put forward by some fans – and even pundits – as part of the justification for a transfer fee or for the often significant salary of the big-name addition.
The theory goes that the buzz generated by the arrival of someone like Lionel Messi, Cristiano Ronaldo or Kylian Mbappe will bring a major windfall as more jerseys will be sold.
Here’s the thing: it’s something of a myth. Sorry to shatter the illusion.
So how much money do football clubs make from shirt sales then? Goal takes a look at the process in order to shed a little light on the matter.
How much money do football clubs make from shirt sales?
The money football clubs make from shirt sales varies from club to club based on factors such as how many shirts are sold and the commission rate they have negotiated with providers.
Even the biggest clubs in the world receive a relatively small percentage of the revenue generated from shirt sales – usually around 7.5 to – if they’re lucky – 15 per cent.
There are some exceptions, of course. Liverpool‘s new five-year £150 million ($200m) deal (£30m a year) with Nike sees them take a 20% commission from sales.
Nike x Liverpool FC 😍
The Premier League champions unveil their new home kit for 2020-21 📸 pic.twitter.com/uBbVfaklW2
— Goal (@goal) August 1, 2020
In Liverpool’s case, imagine that one million shirts are sold in the 2020-21 season at a cost of £80 each. Twenty per cent of £80 is £16, therefore Liverpool would pocket £16 million from those sales.
That would be £16 million on top of the £30 million Nike paid them that year as part of their partnership, with Nike getting £64 million from sales (though production and distribution costs would eat into that).
So why is the return from shirt sales so small, relatively speaking?
Well, it is because the production of kits is essentially a licensing arrangement. Kit providers such as Adidas, Nike, Puma et al pay a club for the right to produce and sell merchandise.
On top of the licensing fee, these providers then give the club a cut of the sales, usually once they pass a certain threshold.
Milan’s 2020-21 Puma home kit is here 🔴⚫️ pic.twitter.com/zLj8kh8eIQ
— Goal (@goal) July 28, 2020
The sportswear manufacturers do most of the hard work, after all, and so, in a business sense, they are quite entitled to take the bulk of the profits.
It is a mightily lucrative industry to get into. Adidas, for example, agreed a 10-year deal with Manchester United, which sees them pay the Premier League giants £750 million over the course of the decade.
However, according to Adidas CEO Herber Hainer, sales projections over those 10 years is £1.5 billion ($2bn), so it is easy to see why manufacturers are willing to fork out such massive sums of money for licences.
Which football clubs sell the most shirts?
According to statista.com, Manchester United were the best-selling club when it came to jerseys sold in 2018-19, while Planet Football observes that Liverpool jerseys were the most popular football jersey on Amazon in 2019-20.