Can signing Messi pay for itself?

Can a massive world class signing pay for itself in increased commercial revenue?   The answer is probably not in the short run, although the real dividend may be a longer run one of raising the club's profile in key global markets.    It gives a leading club an edge over its rivals that may attract sponsors.

The Athletic has reviewed this question in relation to the signing of Lionel Messi by PSG.

In the immediate aftermath of Lionel Messi’s transfer to PSG, the club were at pains to point out that the cost of his deal will, effectively, pay for itself. This, sources argued, would be down to the commercial potential associated with the player. Their confidence echoed statements made earlier this year by Barcelona president Joan Laporta. He said “Messi generates more income than he earns”, before adding that the club conducted a study and found not only that “Messi generates around a third of Barcelona’s total income” but that “all the sponsors demand to have Leo”.

At Messi’s unveiling in Paris, the PSG president Nasser Al-Khelaifi insisted people will be “shocked by the numbers we have” in relation to Messi’s commercial appeal. PSG are working fastidiously to maximise their time with Messi.

The precise machinations of the figures involved in PSG’s deal for Messi are contested but The Athletic reported early in negotiations that Messi had been set to receive at least €25 million net for every season he spends at the club, in addition to a €25 million signing-on bonus. After the deal, sources at PSG explained the final agreement saw a higher wage package in place of a signing-on bonus but the overall cost of the deal remains the same. It is extremely likely that the overall investment will extend significantly beyond the £100 million mark and that will prove to be an extremely modest estimate if the club retain Messi for a third year, through an option in his two-year contract.

For opposition supporters, or neutral journalists, PSG’s initial claims were greeted by scepticism. Clubs that compete in UEFA club competitions are, to an extent, bound by Financial Fair Play restrictions which, in effect, boil down to the principle that a club should only spend what it brings in. Qatar Sports Investment (QSI) own the Parisian club and the state-backed spending has attracted repeated scrutiny from European football’s governing body (although analysis by the Swiss Ramble shows that PSG should meet FFP regulations as they stand at present).

One of the myths that quickly swept across the internet suggested the club had sold 830,000 new jerseys within a couple of days of Messi arriving at the club. This is untrue. Indeed, PSG have only reached a million jerseys sold, taking into account their four different kits, in previous seasons across the whole campaign. The club’s marketing director Fabien Allegre said this week: “We are not magicians.”

While it is true that Messi shirts sold out online within an hour, and that PSG are internally forecasting a 10-20 per cent rise in overall sales and merchandise, the reality is that shirt sales are very rarely a money-spinner for clubs. It is usually the case that a club must hit a high threshold for the number of kits sold to begin receiving royalties. At one Premier League club, for example, The Athletic is aware of a kit manufacturer setting the figure as high as 45 million before any royalties are shared.

The Athletic has been informed PSG’s internal calculations showed that, within ten days of signing Messi, the club’s social media channels had recorded a 19 million rise in followers internationally. The club have noted a particular rise on Chinese social media platforms, while the club’s relevance in the Far East has also been enhanced by a PSG fan park in Shanghai, where the club launched a five-year project in 2018. 

One of the major aims of PSG’s Qatari ownership, which will reach ten years in charge this summer, is to internationalise the business. Upon the takeover in 2011, the club internally measured that 5 per cent of their fan base was international, compared to 95 per cent by their most recent calculations.

There are clearer commercial opportunities that PSG may seek to exploit. Manchester United, who have a very strong commercial operation, have a much vaster array of regional partners than their Parisian counterparts and experts are forecasting that PSG will seek to expand more aggressively in this regard.