BusinessDay

Can PSG recoup Messi’s wage bill from shirt sales?

It’s no longer breaking news that former Barcelona superstar, Lionel Messi has started a new career in France with French Ligue giant, Paris Saint-Germain Football Club (PSG).

Messi, a six-time Ballon d’Or winner, says he is super excited to move to France and has vowed to win trophies for PSG.

Messi signed a two-year deal with PSG, with an option for a third, that will see him net an annual salary of $41 million plus bonuses and a reported $30 million signing fee and approximately £400k per week in wages minimum.

“That’s why I am here. It’s an ambitious club,” Messi told a news conference. “You can see they’re ready to fight for everything.”

Read Also: Messi starts new career with PSG

Messi also said he was “ready to work together with teammates so we can succeed”.

The 34-year-old Argentine said he was “dreaming” of winning a fifth Champions League after signing a two-year contract with PSG.

“I have said my dream is to win another Champions League and I think I’m in the ideal place to have that chance and to do it,” he told reporters.

But the talking point here is how PSG could afford Messi’s wage bill within UEFA’s Financial Fair Play (FFP) regulations.

PSG chairman, Nasser Al-Khelaifi, claimed the world would be surprised in terms of numbers when it comes to having Messi in their ranks and insisted the deal was well within their economic scope.

Read Also: My dream is to win a 5th Champions League with PSG- Messi

“We are always attentive to Financial Fair Play. It’s the first thing we check with the commercial, financial and legal people to see if we can do it before signing someone,” he said.

“I think the media need to focus on the positives and not just the negatives of these moves, but what positives [Messi] brings,” the PSG chairman added. “He’s an unbelievable asset to the club.”

Within 24 hours of signing for PSG, the Argentine superstar generated 30 million Euros in jersey sales, according to Uruguay football reporter Rodrigo Romano.

Romano added that Messi’s Chinese fans contributed 64 percent of sales volume.

Read Also: Here is what Messi will earn if he joins PSG

On PSG’s official online store of Chinese e-commerce platform Taobao, the replica strips quickly sold out at its after the official announcement that Messi had signed a contract with the top French football club earlier this week.

Almost all replica strips were sold out at the official online store of PSG on Taobao, including the home and away kits in players and fans editions, with some unusual sizes remaining in stock.

The online store quickly listed the pre-sale of Messi’s No.30 jersey. The shirts come in men, women, kids and infant versions at a price of between $88.

Despite arriving as a free agent, PSG will pay comfortably more than €100m – if the Argentine stays for three years.

With Kylian Mbappe, Neymar and Sergio Ramos among a host of other high-earning stars, Messi’s arrival adds to their significant wage bill, and there have been reports that PSG could sell up to 10 players to lighten their expenses.

Will thousands of supporters seeking Messi shirt help the club recoup some of the cost of signing him?

Piers Morgan’s tweet that suggests PSG will make the money back in six months has been debunked by several commentators.

Piers Morgan had said the idea that clubs make a significant amount of money from shirt sales might be unlikely. He explained that the manufacturers pocket the majority of cash spent on replica jerseys and beyond.

“The club is normally own about 7 percent per shirt,” Kieran Maguire, author of The Price of Football, said.

Read Also: How Messi would enhance the PSG brand

“It’s good news for manufacturers, the players will have a slice of every shirt sale because there will be intellectual property rights connected with them.

“The way most deals operate, you get a flat fee from Nike or Adidas, for example, plus a percentage. We’ve seen Liverpool accept a lower flat fee and 20 percent, but the standard deal in the Premier League is seven percent on each shirt.”

In 2019, PSG signed a new deal with Nike until 2032, which will see the club make £67.8m annually from the sponsorship.

Nike is responsible for manufacturing the kit and shipping the product out globally and earning the majority from sales.

“PSG sold 150,000 shirts on their website which is good, but it is not going to get you very far with Messi’s wages.

“They’re also not going to do that every day. There’s going to be a huge amount of initial interest which will then tail off,” Maguire adds.

With what Messi is earning, PSG will have to sell over 12 million shirts for the club to recoup the money spent on the Argentine, on Maguire’s seven percent estimate, provided Messi plays for 3 years.

Messi’s arrival is expected to boost PSG commercial revenues, from jersey sales. When Cristiano Ronaldo signed for Italian giants Juventus in 2018, the club made over $60 million in his shirts sales that were sold in just 24 hours.

Kieran Maguire, lecturer in football finance at the University of Liverpool, told CNBC that while the deal may not have a huge commercial impact on France Ligue 1.

“They put 150,000 shirts on sale on their website at 10 p.m. U.K. time and they had sold out within seven minutes, so there are certainly opportunities from commercializing and monetizing the Messi name, and that will have allowed the club to have funded his salary,” Maguire said.

PSG will still benefit from Messi’s arrival commercially, Qatar Airways have Messi’s image across their social accounts.

Messi, a record goalscorer for both Argentina and Barcelona is considered one of the greatest football players of all time

Messi’s arrival will boost PSG’s ambitions to win their first Champions League trophy and reclaim the Ligue 1 title they lost last season to Lille.

Messi, Barcelona’s record goalscorer with 682 in 17 years in the first team, started his career at Newell’s Old Boys in Rosario, Argentina. Messi won the Ballon d’Or a record six times and lifted 35 trophies with Barcelona.

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