Jan 5, 2022
Manchester United signed Cristiano Ronaldo for £23m but sold £187.1m jerseys.
Cristiano’s salary: £23 million
Cristiano’s jersey sales: £187.1 million
Cristiano’s jersey sales was £60 million in the first 24 hours.
For some context, Messi’s jersey sales was £103.8 million.
At the surface, its a no-brainer deal.
Literally signing Cristiano for £23 million and selling £187.1 million in jerseys is a clear £164.1 million profit.
Awesome right?
That is what fans in the bar would regale you about.
Putting on my business cap, I did what any business student would do.
I googled for the economics behind jersey sales.
The rosy picture painted in the media?
Not quite.
Reality is that the clubs barely takes a tiny fraction for every jersey sold.
That is because the official kit manufacturer will handle everything from making the jerseys, packaging, store front, web presence, shipping to customers .etc.
Man Utd practically only takes around £13.1 million from the jersey sales.
Tha means Man Utd takes only 7% for every jersey they sell.
Gobsmacked.
Who is the official kit manufacturer for Man Utd?
Adidas.
So how do they end up there?
They pay a hefty sum to help Man Utd make and sell their kits.
Adidas pays Man Utd £75 million a year for that right.
In 2014, they signed a £750 million 10-year deal.
No wonder they are taking up to 93% of every jersey sold.
Additionally, Adidas takes 100%, up to a certain pre-determined amount of jerseys, before profit-sharing with Man Utd.
Oh by the way, each jersey costs around £153.
Golden question: how many jerseys must Man Utd sell to make up for signing Cristiano?
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