Profile: Lionel Messi - Who can afford the greatest of all time?

8 February 2021

test
Photo: PA Images Lionel Messi celebrating one of the most famous wins as a Barcelona-player when Barca in March 2017 won 6-1 at home against Paris Saint Germain after a 4-0 defeat in the first Champions League leg.

Leaked details of Lionel Messi’s contract revealed him to be the highest paid sportsman of all time, with € half billion 4-year contract.

Messi has earned €2.95 million per game on 2017 deal, which expires in June.

Man who brought Pele to New York Cosmos says not even Messi could replicate Brazilian’s commercial impact.

Sports salaries expert: “It's certainly close to impossible to make a valid case that he could pay back those kind of sums if hired by another club.”

Off The Pitch try to investigate if there is an economic case for the man with a nine figure pay cheque?

James Corbett corbett@offthepitch.com

Even in football’s era of excess, when Lionel Messi’s four year contract was splashed all over the front page of the Spanish newspaper, El Mundo, last week the numbers seemed to belong to a different stratosphere.

€555,237,619 – the total amount Barcelona agreed to pay the Argentine in 2017, if win bonuses and image rights were included.

€511,540,545 earned so far or €127 million per year.

€2.95 million per game.

€3.57 million for each of his 143 Barcelona goals since 2017.

Or €35,181 for each of the 14540 minutes he has played for the club since the start of his contract.

The figures seemed to be so mind-boggling that they even defined much criticism.

One man, however, wasn’t entirely taken aback by their scale.

Staggering sums

The sportswriter, Nick Harris, has been compiling the Global Sports Salary Survey (GSSS) since 2009, the most authoritative source of salary information in the industry.

He points to the 2017/18 edition of the survey, when Messi signed his most recent deal with Barcelona, and his sources at Barcelona told him the basic element was worth around £57 million – around €64 million at the time. 

“The final figures aren't that much of a surprise given the huge bonus and loyalty elements also available to Messi in that contract,” says Harris. 

“These are nonetheless staggering sums, putting Messi's annual earnings the number one sum of any sportsman in history, far ahead of any NBA, NFL or MLB star, far ahead of any boxer, any F1 driver, anyone.

“And it's certainly close to impossible to make a valid case that he could pay back those kind of sums if hired by another club.”

This is a crucial point, for in less than a 150 days time, Messi’s contract expires. When that happens Messi will be six days past his 34th birthday. Barca, like many clubs during Covid, are facing the financial abyss.

Man City and PSG, clubs with wealthy owners, are said to be watching, and if they didn’t before, now they definitely know his price.

Will the Argentine stay? Will he go? Either way, is there an economic case for the man with a nine figure pay cheque?

Coveting legends

Signing the ‘greatest of all time’ has never been easy, but equally never really subject to the sort of eye-boggling sums we see today. In 1928, fresh from scoring 60 league goals in a single season, the New York Giants tried to lure Everton’s Dixie Dean to the American Soccer League. Dean was paid £8 per week at Everton; his “stupendous” offer to go to America was £25. Dean declined.

32 years later, Everton’s millionaire owner John Moores tried to lure Ferenc Puskas to Goodison with the promise of a £15,000 signing on fee and a £10,000 salary paid via the back route of his Littlewoods Pools business. Players in England at the time were limited to £21 per week maximum wages – a tenth of the proposed pay on offer.

Puskas, who had just scored four goals in Real Madrid’s European Cup final win over Eintracht Frankfurt was denied by an unholy alliance. “The Home Office would not have admitted him into the country as an alien, the Players’ Union would have objected and the League would have vetoed it too,” Moores complained in 1962.

By the 1980s and 1990s, when 30 was considered ‘over the hill’, superstars went on a farewell tour, mostly without large financial rewards. 36-year-old Johan Cruyff wound up at Feyenoord, having been abruptly left out of Ajax’s plans. At 31 Diego Maradona was washed up and in disgrace by the time he joined Sevilla in 1992, later embarking on several playing cameos in his native Argentina.

Pele in New York

Perhaps the most eye-catching transfer of one of the all-time greats was that of Pele to New York Cosmos in 1975. The New York Times reported at the time that Pele was being paid $7 million over three years – worth around $35 million today (£15.4 million).

To put that into context, the most Britain’s most expensive player at the time – Bob Latchford – ever earned in a single year was £50,000.

The Cosmos’ general manager Clive Toye says the numbers advanced by the New York Times were “total rubbish” and that the sum paid to Pele were less than a third of the published amount. Even still, it was far beyond what anyone else earned from football at the time.

 ...in Belgium I say $3 million for two years and now you say $2 million for three years

“Pele was paid $2 million plus a little more for three years...not each year but for three years, total,” says Toye. “This included all his marketing rights as well as his playing rights plus 14 more years for his name to be used in connection with the Warner Communications brand [who owned Cosmos].”

Toye trailed Pele all over the world in an attempt to get him to sign up for the Cosmos project. “There was never an agent,” he recalls, just Pele’s personal trainer Julio Mazzei “an excellent English speaker” and brother, Zoca; plus Kurt Lamm of the USSF “who knew Pele well and introduced us”, and some lawyers at the end.

Sponsors were lining up

“We reached a conclusion, after many many meetings, that Pele would sign and said what he wanted,” says Toye.  

“We arranged the next meeting, in Rome, where I made him the formal offer.   His response, which I can still hear: ‘Cliveee, my English is not good.’  ‘Yes it is Pele,’ I said, ‘Better than my Portuguese.’  ‘No, no, he said, my English is not good...in Belgium I say $3 million for two years and now you say $2 million for three years.’”

Pele nevertheless took the lower amount and Cosmos’s fortunes were transformed. 

“Our crowds went from around 10,000 immediately to 25,000+ and then 80,000+ as soon as we could move to Giants Stadium... sponsors were lining up at the door, TV begging for more, huge income from foreign tours,” says Toye. 

By the time the Brazilian retired in 1977, he had been joined by Franz Beckenbauer and Carlos Alberto and the Cosmos was America’s greatest football franchise – something arguably true today, despite it not competing in the MLS.

Defraying Ronaldo’s costs

Three years ago, aged 33, Messi’s perennial rival for the title of ‘the greatest’ – Cristiano Ronaldo – swapped Real Madrid for Juventus in a €100million deal. 

On the pitch he has helped continue Juventus's domestic hegemony – they have won the last two Scudettas, even if its record in cup competitions hasn’t improved (Juventus have reached the Champions League quarter finals and round of 16 in his two full seasons, having reached the quarter finals and final in preceding seasons). 

But how has Ronaldo impacted Juventus's bottom line? Because Covid decimated the 2020 results, it is difficult to show a sustained trend. But we can contrast the figures from Ronaldo’s first season in Turin with the preceding one – where on pitch performance was consistent. Turnover increased by €83.7million, with big increases in commercial revenue.

 

These rises alone would roughly defray the costs (€25 million amortisation + €30 million wages) of signing a megastar like Ronaldo and give hope for a club looking to sign a Messi. But delve a bit deeper and the deal becomes less attractive. Juventus’s losses rose by 160 per cent to €26.9 million in 2019, while Real Madrid’s profit increased to €53.9 million without their talisman. Turnover, commercial and matchday income remained consistent at the Bernebau, while wages dropped 8.4 per cent to €394.2 million.  

“It shows that even the footballer who is arguably the most marketable in the world can ‘only’ add €55 million in income for Italy's biggest club, and hence roughly defray the cost,” says Harris. 

“And I specifically cite Ronaldo as more marketable than Messi because A) he's more of a ‘sell’ because of his looks and his vanity and his desire to market himself in a way Messi isn't; B) he knows that putting himself "out there" is necessary and flogs himself in a way Messi never has.”

 

The case against Messi

Could Messi ever defray his €127 million per year package?

“I think on the surface, the obvious answer is no,” says Omar Chaudhuri, chief intelligence officer of 21st Club, an intelligence and strategic advisory for football clubs.

“No football club upon signing a player or in any circumstances increases their revenue by that much in a single year. The only case is when a club gets promoted from The Championship. I suppose that's the one instance where you see that kind of revenue leap. So arguably Norwich or Nottingham Forest or Swansea could benefit the most.”

Nick Harris says that it is virtually impossible to enumerate Messi’s contribution to the Barca bottom line on a per season basis. But when you take his career at the Nou Camp as a whole a case for a nine-figure salary becomes apparent.

“It is extremely hard to quantify Messi's specific contribution to Barcelona's coffers but it is fairly easy to say he has been THE key figure at the club during its most significant and massive financial growth,” he says.

“If we go back to the 2006/07 season, the first season Messi scored league goals in double digits, and really started becoming the heartbeat of the club, Barca's revenues were €290 million. Without Covid, in 2019/20, that would have become €1 billion for the season.

“You might argue that his pivotal role in this incredible period did in fact warrant his big salaries overall. Whether you could defend more than €100 million per year since 2017 in the same way is harder to justify in hard commercial terms.”

Long term indicators

However, Chaudhuri says that a more holistic view should be made by suitors for Messi’s signature: “I think that would be an overly simplistic argument on the basis that football club will grow their revenues over a longer a period of time. And the revenue that you realise today is not necessarily a function of what had happened in the last 12 months, it'll be the assumption of what happened over a longer period of time.”

He cites the example of Manchester United, whose revenue commercial growth continued to be extremely high off the back of the unprecedented Alex Ferguson era, even as late as 2017 – four years after the Scot had left.

“Ultimately,” says Chaudhuri, “Commercial income is a lagging indicator of performance. If you perform well, then then the commercial income should follow.”

Intangible benefits

Perhaps, also, the benefits of signing football royalty are more intangible. In a wide-ranging discussion paper Jeff Jacobs, Pallav Jain, and Kushan Surana of management consultants McKinsey & Co argue that football sponsorship remains undeveloped compared to US sports and that most sponsors don’t fully understand how to gauge ROI.

Moreover, when it comes to long term brand attributes and indirect benefits, companies “often either neglect or overestimate these sources of revenue when calculating ROI.”

“Sponsorships have the potential to reach beyond short-term sales to build a brand’s identity,” argue the McKinsey authors. “Brand strength contributes 60 to 80 percent to overall sales, making this benefit critical for sustained, long-term sales growth.” Such deals “may also stimulate indirect sales.”

In the case of a Messi or Ronaldo, according to this hypothesis, they add to the value of a club as a brand and their stardust remains even if they have moved on. Sponsors buying into that brand will reap a ROI from that association not only at the time that the player is active, but long into the future. Who wouldn’t want to be sponsoring a club linked to one of the world’s greatest players?

Destination nowhere

If Messi does move on, where does he go? If €127 million per year is the asking price there are seemingly few destinations. Taking aside the improbability that he’d join such a club, non Champions League teams would potentially reap the biggest dividend if Messi elevated his new team into Europe’s elite tournament. But such teams with mega-rich owners are few and those that do exist, like Everton or Zenit St Petersburg, would be precluded by financial fair play rules.

“The reality is that most of the clubs who might hire him are already finishing in or around the top places in their domestic leagues and cups, and advancing fairly deep in Europe,” says Harris.

test
Photo: PA Images A Barca-fan outside the FC Barcelona training ground showing his support last summer when rumours were suggesting that the Argentinian player was ready to leave the club.

“The incremental extra bits would be just that, bits, relatively. Low millions, maybe at a push €10-20. Which leaves commercial revenue, and let's start by eliminating the red herring of millions of shirt sales. It doesn't happen, and the added revenue per shirt is buttons in the grand scheme of things.

“So it boils down to whether you can attract a huge sum - €100 million or more, per year - specifically because Messi is on the team, heading towards the wrong end of his 30s.

“This is grossly simplified, but the reality is: that's a tough ask. A huge risk for a sponsor, not least as Messi is not well known for wanting to take on too many promotional duties, even for some of Barcelona's major sponsors.”

A clear bond there

Toye says that the sort of effect Pele once had at Cosmos could not be replicated. “Could a club ever achieve the same, you ask,” he ponders.  

“Well, I guess they would have to start not by signing the world's greatest player but in hiring the world's greatest general manager.”

Chaudhuri can’t see Messi playing for another club other than Barcelona, saying that the scale of the finances needed, the existing bond Messi has with Barcelona and the precipitous financial environment due to Covid are likely preclude other interest.

“He is pretty much synonymous with the club; there is a clear bond there,” he says. “You could argue that there's been a sort of friction around that bond in the last 12 months or so, but it's difficult to imagine him in any other shirt than Barcelona or Argentina.

“I think that he will remain, but that's also partly because I think the figures are just so astronomical… Clubs in the current circumstances with Covid would just really struggle to make that outlay unless they're already making it - as Barcelona are at the moment.”