Today let’s talk about another thing that I am very passionate about, football. But not just any part of football, let’s talk about one of the greatest players to grace the sport, Lionel Messi. Anyone who has ever seen Messi play will know he is a pleasure to watch as his presence on the pitch adds magnificence to any team. 

However, the football world was turned upside down and left Barcelona fans in shock after he turned in a transfer request after Barcelona were thrown out of the Champions league following an 8-2 thrashing by Bayern Munich. Years of European incompetence from the Spanish team simply were not up to Messi’s standards and it is said he grew even more tired of being thrown out of yet another Champions league.      

Currently valued by his contract at €700 million, this transfer wouldn’t just be for any club given the current financial climate. Only the larger clubs like Manchester United, Manchester City, Chelsea and Paris Saint Germain, would have the economic support required by this transfer. Being one of the worlds most sought after football players means that his salary is also sky-high, with the footballer being paid over £7 million a month. There is a reason as to why Messi and all other top flight players get paid extortionate amounts: the economic theory of supply and demand. 

Supply and demand decides how much everything costs and in this instance it is a football player’s salaries. In this case, supply is the number of players talented enough to play in the top leagues such as the Premier League. Demand is the number of wealthy teams who want to buy the players.

Many of the sources of revenue for football clubs have been temporarily shut down due to the corona virus such as ticket revenue, stadium tours, executive lounges and match day boxes however, it was even worse when football was stopped completely. All in all, €700 million is a lot to spend during these times of financial uncertainty and there is no doubt that it would leave a hefty dent in any of the clubs that have been aforementioned.

These unheard of circumstances make the chances of Messi’s move away from Barcelona slim, however, the world’s largest football clubs could make this transfer possible. How could a club finance this transfer in these times of financial uncertainty you may ask? It is far from straightforward to say the least. The effects of the corona virus have shut down many sources of revenue such as ticket sales and box renting so there would be a drastic difference in revenue between now and post-pandemic.

It would be easy to recover in the long-term. The aforementioned teams buy quality players, like Messi, as they increase the chances of winning titles and with those titles comes money.

If we take Manchester City as an example, they have seen revenue grow each year with the biggest rises being in TV rights and commercial sales (Football shirts etc):

With Messi playing for Manchester City, we would expect to see increases in audience both in physical matches and also via broadcast – this may translate to more bargaining power when negotiating TV rights. 

Manchester City earned over £76 million from their champions league exploits in the 2015-16 season. That’s a lot on it’s own, but what makes it even more noteworthy is that £42 million of that was from their TV coverage. They reached the semi-final, of course, so there was a decent amount of screen time for them. Had they been knocked out earlier they would have won less, but you’re still talking in the region of £20 million plus from TV alone.

However, lets not forget the humble football top, which is big business. The football clubs change the designs of their team strip every season but could Manchester City fund their signing of Messi with football shirts? Let’s look at the shirt sales for some of the most popular clubs, at approximately £50-70 a shirt, that’s a solid revenue stream for clubs:

It was reported that Juventus sold more than 500,000 shirts with Cristiano Ronaldo’s name after he signed in 2018. So let’s take that as a potential uplift in sales, especially as Messi and Manchester City are bigger brands than Juventus and Ronaldo. So what could additional shirt sales bring in:

Amount of Sales: 500,000 (approx 50% of last reported sales)

Cost: £50.00

Revenue: £25,000,000

However, the clubs only receive a portion of this whilst the rest goes to the manufacturer, logistics, marketing, etc with the club only receiving around 10% of sales. So in this instance City would only see an additional £2.5 million in revenue or 2.5 weeks’ supposed salary for Messi.

The economics look shaky at best for paying the rumoured hundreds of millions plus a large salary bill. The reported 700 million euro fee (excluding salary) is more than City made in revenue in 2019 and financing this via shirt sales would be a major challenge.

It will be interesting to see what transpires and if as the cynics suggest, this is just a negotiating ploy by Messi to obtain a better final contract to see out his playing years or he really is serious about leaving. Whatever the case, clubs like Manchester City have shown they can be ‘creative’ in their approach to club economics to avoid breaching FIFA rules and also willing to take a gamble on a big name to continue the momentum.