Inside Pulse 12

Why the £120 million for Paul Pogba is worth it to Manchester United (Shirt sales, sponsorship and TV revenue)

As I write this article, the world is preparing to see Frenchman Paul Pogba, complete a transfer from Juventus to Manchester United, for a reported world record fee of £120 million. As you read this, that transfer may have already been completed. I’m sure some angry football fans are readying themselves to comment on twitter about it. “What has football come to” “It is all a business nowadays, stupid money, for a player that isn’t worth it”. Simply put, those people will be wrong. This is nothing new. Football has been a business for a long time, like almost everything in the world. As far as Paul Pogba not being worth £120 million, no, as a player on the pitch he is not. That doesn’t matter though, because he will be more than worth it off the pitch.

Football is a big business, especially in Europe, and that business has just gotten a whole lot bigger in England. The premier league has sold the rights to broadcast its games to SKY and BT for over 5 billion, yes billion with a B, pounds. Of course, that’s just UK TV rights. There are plenty more deals around the world. This money is distributed out to clubs, the amount depending on the amount of their games chosen for broadcast, and that is why spending has been so high this summer. Of course, this is just one of the sources of finance available to clubs; I’ll get into some of the others further on in the article.

A lot of mid table clubs have been spending high this summer, not only because they’ve got the money, because they desperately want to keep receiving that money. Staying in the league, earning large amounts of prize money and retaining the TV money, is worth spending massive sums o on players. For a team like Manchester United, staying in the league should not be a worry. However, having big name players means more games being broadcasted, resulting in more money from the TV deal.

For United, signing Zlatan Ibrahimović could actually help fund the Pogba deal. United have signed one of the most marketable players in the world. Instead of paying a 30-40 million transfer fee for a less marketable striker, UTD have signed Ibrahimović for free. They’ve saved themselves a transfer fee, and will probably make more money off of Ibrahimović – at least in the short term. The fact is players have far more worth to big clubs like UTD, than just what they do on the pitch. These players help sell merchandise, tickets to games, they get deals with brands like Nike, of which the club can sometimes get a cut and they attract lucrative sponsorships, among other sources of revenue.

United sold just under three million football shirts, worldwide, in the 15-16 season. This is despite little excitement surrounding the club that season, coming off the back of a disappointing campaign the year before, and the year before that. Even with that, with an authentic shirt costing at least £40, that means at least about £120 million made from those shirts. Obviously there are manufacturing costs, and other companies will earn part of that, but United, and other premier league clubs, make a lot of money from shirt sales.

Imagine the next few season for United. In a bad period they still managed around three million shirt sales according to the mirror. They’re now far more optimistic, they’re managed by Jose Mourinho, they’ve signed Ibrahimović and some other world class players and the premier league is growing in popularity in foreign countries. If United also sign Pogba, they’ll make far more than last year on shirt sales, possibly rivalling last year’s highest sellers, Barcelona, who sold over 3.6 million shirts.

So how in the end does this all link up to Paul Pogba being worth the insane fee of £120 million? Paul Pogba, if marketed correctly and this is Manchester United we are talking about, so he will be marketed correctly, will be a gold mine for United. If Pogba, who is 23 years old, stays with United for ten years, he will help them make far more money than he costs them. Over a ten year period his wages will probably amount to more than his fee, he could all and all end up costing something like £350 million. However, if in ten years Pogba has helped United win five league titles, a few cups and a champions league, they’ll have probably earned far more than £350 in prize money – £93 million will reportedly go to the winner of the league – and TV revenue. Additionally, if he helps United to sell out Old Trafford on a regular basis, as well as sell a variety of merchandise – On today’s scale United could sell upwards of 30 million shirts in 10 years, many of which could have Pogba’s name on the back – he will be well worth the money. This isn’t even beginning to get into talk of clubs sponsors, player sponsors, endorsement and boot deals.

How about if Pogba doesn’t stay at United for ten years? Maybe he decides in three years he wants a new challenge. Well the likes of Real Madrid and Barcelona will have to come prepared to spend more than the £120 million United signed him for. Even if Pogba proves not to be a success on the pitch, in three years’ time United could still easily recoup at least two thirds of the original transfer fee. Three years being enough time to make far more than the other £40 million, from other financial sources through Pogba.

Transfers in the world of football today, have largely become business deals, rather than just football deals. Players are a business investment. Highers up’s at clubs look at young players and see their potential for creating cash, rather than just their potential on the pitch. The same goes for transfers like 18 year old Renato Sanches. Bayern Munich will probably end up paying Benfica £50 million, for the Portuguese European Championship winner. If you need any indication to Bayern’s motivation to pay this money, we will see how many Bayern Munich shirts are sold in Portugal compared to last year. At 18 years old, Sanches offers the potential of probably a minimal 17 years playing in Munich, if another club comes calling, at the rate transfer fees are progressing, he will be worth far more than the £50 million Bayern are going to pay for him.

As much as some may detest it, all top clubs in the world are not just football clubs, they are businesses. Paul Pogba will not make such an impact on the pitch that proves to be worth £120 million. However, performance on the pitch comes second to performance in profits made, when it comes to the people who really have the power at football clubs. If performance was more important to the higher ups, managers wouldn’t be the only personnel pushed out of a club after a poor season. Players who prove not to be good enough would walk also, the problem is, those players are worth far more than their performance on the pitch. Wayne Rooney can play as badly as he wants on the pitch, as long as shirts with his name on them still sell, he will have a worth to Manchester United.

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