How much are shirt sales really worth?

[coolhead23 1,146]

Yet another interesting viewpoint from We Ain't Got No History. For all of us who have always been interested in knowing about Shirt Sales ... Good Read!

How much are shirt sales really worth?

A recent discussion (and many previous discussions) brought up the idea that Chelsea buying a hugely popular player like Neymar or Hulk could end up being a "bargain" no matter the price of the transfer fee, since shirt sales would cancel this out. There was talk back in the day that Real Madrid earned back Cristiano Ronaldo's 80 million euro transfer fee through shirt sales, and something similar was suggested regarding David Beckham's galactico move. But who exactly was talking, you ask? The answer is people.

Now, instead of making reactionary statements (like "people are idiots", for example), I decided to look into this shirt sales phenomenon in greater detail, to make sure any future claim could be supported by a logical argument backed up by facts and whatnot. See what I found after the jump.

There are many questions we need to ask when talking about shirt sales - How many shirts does the club sell? How much profit does the club actually make from those shirts? Who sells the most shirts?

First of all, let's see how much Chelsea earns for each shirt sold. There aren't very many numbers available for the profit stemming from shirt sales (or perhaps I'm too lazy to dig deep enough*), so I ended up using figures found in articles by the always excellent Swiss Ramble. As listed in this story about Barcelona and Ibrahimovic, the average profit that a club receives from selling one shirt is around 12 euros. That's not particularly much.

[* If you have dug up some better / more definitive sources, drop a link in the comments!]

But surely big clubs sell so many shirts that all the money adds up, right? Well, in this article about Paris Saint-Germain, we can see that Manchester United and Real Madrid sell the most shirts: 1.2-1.5 million a year. That info comes form a study by Dr Peter Rohlmann, who also has figures for other top clubs available here (EDIT: full article). In comparison, Chelsea sells 700-900 thousand shirts a year. These figures are averages of total sales from 2005 to 2009, so they may be slightly inaccurate today, but that's all we have to work with.

So what does this mean in terms of club revenue? Using the higher number in the range to calculate, that means Madrid makes 18 million euros a year from shirt sales. One might be thinking that's not bad at all - that money lets Chelsea buy both Gary Cahill and Marko Marin, or one Nicolas Anelka, or Romelu Lukaku with his add-ons. For simplicity** let's even assume Chelsea is as "popular" [read: profitable] today as Madrid was in the 05-09 period. So 18 million euros a year. But that's all shirt sales. We have to find how much money individual players bring in.

[** 18 million is more convenient for the subsequent calculations, a more accurate range for Chelsea would be 8.4-10.8 million]

How much is any one player worth? Well, on average, each player in an 18-man (what a nice round number) squad sells 83,333 shirts each year, earning the club 1 million euros annually. Obviously, some players are more popular than others - Didier Drogba would have sold more shirts than Yuri Zhirkov, for example - but that's why we use averages. What that means is no player at Chelsea sells enough shirts to offset their wages, which are all higher than 20,000 euros a week (which equates to about 1 million a year).

But what about a really popular player, you ask? Cristiano Ronaldo was apparently reported to have sold 1.2 million shirts in Madrid alone. Well, it's the Metro, and there are no quotes form any Madrid representative in the article, and it is suspiciously close to the total figures reported by Adidas above, so I don't really trust this report at all. But let's play with these numbers anyway:

Since the shirts only make 12 euros profit, that's 14.4 million euros in that year. Assuming steady sales over the life of a five year contract, that's 72 million euros. Hey, that almost pays off! But wait, big players earn big money - what is Cristiano Ronaldo's salary? Forbes lists his wages at 20 million US dollars, or 16.3 million euros, a year. So all the money Madrid make from Ronaldo shirts is used... to pay Ronaldo.

So then say Chelsea pays 40 million euros for Neymar, and matches his salary to that of David Luiz*** - somewhere near 30,000 pounds, or 38,000 euros, a week - around 1.5 million euros a year. To break even, Neymar would have to sell around 750,000 shirts each year of a five year contract, all while other players each sell over 83,000. That seems highly unlikely.

[***The source for Luiz's wages is a comment by our very own Graham MacAree]

It should also be noted that all these figures are still overestimates of profit for the club, for a number of possible reasons:

• The figures used were total shirt sales, but many fans buy 'blank' shirts, or ones with customised names. Thus, the proportion and number of shirts attributable to individual players is less than calculated.
  
• As for steady sales over the length of a contract - if those supposed 1.2 million Madrid fans already have one Ronaldo shirt, would they buy another Ronaldo one the next year, or ever again? Probably not. That means any player will have to bring in new fans every year to keep up sales.
  
• It remains to be seen how many fans of a given player buy authentic shirts as opposed to replicas, which earn the club nothing.
  
• It also needs to be considered whether any given Chelsea fan buying a named shirt is buying it because of a particular player, or for other reasons, such as liking the current season's design - basically, would they still have bought the shirt if the player wasn't on the team? Looking at some of the conversations on this blog, the answer is probably yes, but I think proving this either way is almost impossible.
  

All things considered, shirt sales are an okay source of revenue for the club. 8.4-18 million euros a year is better than nothing - for comparison our deal with Samsung is estimated to be around 14 million euros annually. But the impact of individual players (especially popular ones) on shirt sales has been grossly overestimated. No player can pay for himself on the back of shirt sales, so if anyone suggests that they can, feel free to tell them they're wrong.

http://www.weaintgotnohistory.com/2012/7/30/3201349/how-much-are-shirt-sales-really-worth

[The Rising Sun 710]

i think its a little more wholistic , rather than only shirt sales, when a big name comes in....

I think while people say shirt sales, they do in some way or another take these as givens....

These are assumptions.

Without Elaborating....

1. A whole new set of fans

2. Leading to more viewership

3. Suppose the biggest player from China came, then surely, more matches would be broadcast in China of Chelsea, leading to some sort of increase in club broadcasting revenue.

4. Club sponsorships become more valuable.

5. Naturally, you expect to go further in competitions and win more trophies....i.e. more money to the club.

6. Shirt sales, obviously.

7. For a club like chelsea, which does not have some 600-700 million fans like United, Global reach is most important. In the short term, big signings might not seem like they can pay back their fee, but in the long term, when we have 500 million+ fans, every point that i mentioned earlier gets you that much more money.

Point No, 5 ....For example, the CL win supposedly gave us 45 mill in winnings alone. That means Lukaku repayed 3-4 million of his fee on that day itself, based on an average of an 18 player squad.

Sorry a bit off topic, but worth noting.