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Here’s something to ponder: To what extent was Liverpool’s Nike deal a factor in driving Thiago Alcántara’s signing off the line? before the club started selling its own assets?
“Sometimes you don’t buy now, but you buy later and sometimes you get the money back in different ways,” Jurgen Klopp said Thursday before Thiago’s signing. It was the first time that Klopp explicitly expressed Liverpool’s philosophy of selling to buy.
But Klopp’s framing represented a change from the report the club has been distributing to journalists. Initially, all reports indicated that while Liverpool were really interested in Thiago, they would have to “sell to buy”. The inference was obvious: once the club had cleared its deadwood or made a decision about Gini Wijnaldum’s future, then would open negotiations with Bayern because they would have a better view of the fiscal outlook.
But Klopp tipped the club on Thursday. Selling to buy does not necessarily mean it should be done in that order. You can buy, know the number to hit, and then sell accordingly.
In some ways, it is a disadvantage in negotiations: the rivals know the number you want to reach. But in others, it is positive. Liverpool picked up Thiago at a slight discount for COVID / last year of his contract. Bayern lowered their starting price from £ 28 million to £ 20 million with the possibility of an additional £ 5 million in add-ons. As a percentage, that’s pretty high.
If Liverpool had sold players in an attempt to match the first figure, they may have had to dump one more asset than Really they wanted or were sold shorts in the negotiations. At £ 20 million (only £ 5 million this season) they can hold a firm line into the future, with the property surely set to prop up £ 5 million if it means not letting players walk away at a depreciated rate.
We’ve already seen some of this with the sale of Ki-Jana Hoever, who is expected to move to Wolves for £ 10 million. Obviously, that deal was in the works along with Thiago’s move, but knowing the final totals makes it much easier to sanction his sale: a Liverpool player signed for 90 thousand two years (and one of tremendous talent, by the way), simply recovered medium Thiago’s worth 24 hours after his signing became pseudo-official. One prospect for half a world-class gamer – that’s a smart deal.
Other sales will come. We also got to see the newcomers.
As Klopp pointed out, the club will look for “other ways” to generate income. One way was of course be t-shirt sales. However, the launch of Nike has not gone as well for the club as they would have hoped when they reached the agreement.
As the Liverpool Echo reported yesterday, Liverpool kit sales are down 12 percent. Given that we are still in the midst of a global pandemic, varying degrees of lockdowns around the world, and a recession, that number makes sense. But it will continue to sting Liverpool’s books.
A decline in jersey sales would normally be a frustration for the manufacturer, but this year’s sales have a real and tangible impact on the club.
Liverpool’s new merchandising deal with Nike is, in essence, a gamble, albeit a calculated one.
Liverpool’s contract with Nike is worth around £ 30 million a year, guaranteed, which is £ 15 million less than the bottom line won with New Balance. The deal with Nike, however, guarantees Liverpool 20% royalties on all sales, which could push revenue figures into the insane range. The club anticipates that eventual revenues will dwarf the number they were making with New Balance given Nike’s infrastructure and global reach.
But that was before the coronavirus and the after effects. It would have been nice to have some certainty in this market: with the royalty approach, Liverpool invited risk.
Worse: They have fallen from their best-selling position, with Arsenal jumping to first place in the best-seller rankings and Chelsea sliding to second. Liverpool’s last home kit with New Balance was comfortably the best-selling in the league last season, but this year’s home model has slipped to third place. The club’s visiting team has seen an increase in sales compared to last year’s edition, but not enough to fill the gaps elsewhere. The drop in ranking suggests that the drop in sales is not just due to COVID.
Perhaps the moment of the agreement with Thiago is connected; perhaps Thiago’s announcement could help boost the club’s sales after a slow start.
It shouldn’t go unnoticed that the initial leak that confirmed Thiago was on his way came with a huge Wear the number six attached to. The reason feels twofold: encouraging fans to come out now and collect your goods from Thiago; to dispel the idea that Thiago is entering means that Gini Wijnaldum is leaving. Look, Thiago is playing role number six, literally Gini is not going.
It should also be noted that big name signings do not usually help with the sale of shirts, at least in mega clubs. ‘They’ll get the money back on t-shirt sales’ is the common trope of a big money move, whether it’s related to a transfer fee or a player’s salary. But this is not how such agreements usually work.
Clubs generally do not receive money from T-shirt sales. They sell their rights to Nike or Addidas or New Balance or whatever manufacturer (there’s a reason those companies pay over £ 100 million for the rights). The club then receives somewhere in the order of ten to fifteen percent of the actual sales proceeds, depending on its influence on the negotiations. And, as is often pointed out, there are only a small number of converts who will buy a jersey due to a new signing who would not have chosen one. anyway — And that usually has to do with venturing into a new market. People who would buy a Sancho uniform at Manchester United, for example, would probably always buy a uniform for United teams first, just with a different or no name on the back.
But that’s where Liverpool’s relationship with Nike is different. They will benefit, directly, even from a fractional increase in sales. And according to the club, in the current circumstances, every penny counts. Maybe Thiago will spark a new round of excitement or draw elements from the neutral (read: hipster) crowd to pick up a kit with his name on the back.
It has been a slow start to life under Nike, financially speaking. Announcing Thiago now can help the club increase its numbers and fill its coffers before the transfer window closes.
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