The Misconception on Shirt Sales.

 

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The idea about shirt sales comes in after a blockbuster move by superstar players. To name a few, David Beckham to Real Madrid in 2003 (€ 35 Million), Paul Pogba to Manchester United in 2016 (€ 105 Million), and Cristiano Ronaldo to Juventus in 2018 (€ 100 Million). All these were big-money moves that cost the clubs a fortune. However, these transfers increased shirt sales by the clubs that broke their banks for the deals. After Beckham's arrival, Real Madrid sold 1 million jerseys, Juventus sold 500,000 shirt sales after Ronaldo's transfer, and Pogba’s shirt sales-generating £200 million in shirt sales after just a week in Manchester United.

It can be perceived that the various clubs did recover the amounts they paid for the player’s purchases. However, this is not true.

The kit manufacturers get close to 80-90% of the money generated from shirt sales. Clubs only get a commission on sales, traditionally averaging 7.5% of the sales. Liverpool, however, gets a 20% commission on shirt sales in their current deal with Nike. (Highest in the Premier League.) In other deals, the kit manufacturer may agree with the club that the club will receive a certain amount of money in terms of royalties on meeting a certain threshold of shirt sales. Such is the case for the Manchester United deal with Adidas that is so large in which the English club only receives royalties after a particular milestone in shirt sales is achieved.

The Pogba Deal.

It cost United a whopping £89 Million (€ 105 Million) to lure the Frenchman back to Old Trafford. Many perceive that the shirt sales indeed recouped the amount spent on the transfer. However, this is not true. If United sold one million shirts and the club receives a 20% commission on sales, then that would mean that would still not even come close to the amount spent by United on Pogba. United is a big club with a huge fan base; hence, making shirt sales that would recoup the amount would be easy. However, Manchester United only managed to sell an average of 1.85 Million shirts between the 2014/15 to 2018/19 Season. This, however not even close to recovering the amount.

Why can't clubs then manufacture the kits for themselves and get 100% profit from sales?

Football clubs are Football Clubs and not manufacturing companies. According to Sport's Lawyer Jake Cohen, football clubs do not have enough infrastructure to manufacture kits or even distribute the merchandise. They do not have a global network to manufacture, sell and distribute their kits. Therefore manufacturing the kits would mean going out of the core purpose of the football club and colossal cost.

Kit Manufacturer’s Deals

Kit manufacturers such as Adidas, Nike, and Puma are handed over club licenses by the various clubs, which comes at an annual fee they pay to the clubs for a specified period. Adidas, pay an annual fee of £ 75 million to Manchester United and £ 85 Million to Real Madrid. Nike pays £ 100 Million to FC Barcelona, £ 70 Million to Liverpool, and £ 60 Million to Chelsea in trade for their club licenses.

Manufacturers do not pay for the club logos on their kit, but this is a lucrative investment that yields high returns. For instance, Adidas is reported to earn £ 1.5 Billion from the 10- year contract with Manchester United from the £ 75 Million it annually pays the club. Football clubs are tiny businesses compared to Kit Manufacturers as revenue earned by the football clubs is like an oil drop into the ocean compared to the revenue generated by the kit manufacturers. For instance, Nike earnings between April and May 2017 (£ 7 Billion) is more than what Chelsea earned in its entire history (since 1905)

It can be summed up as a star player transfer is an advantage to the Kit Manufacturer and not the club in terms of revenue but an advantage to the team's on-field performance.

A Jadon Sancho deal to Manchester United would only shed some light on the fans regaining trust in the United Hierachy and improve Manchester United's play but have no signifact impact on the income generated in regards to recouping money spent on the transfer.