Finance guru refutes Liverpool 'myth' as £350m deal explained - It's nonsense'
Most of the money from the Liverpool kit deal with Nike comes from an annual flat fee – the idea that “shirt sales pay for signings is nonsense.”
That is the view of finance expert Doctor Dan Plumley, speaking exclusively to Football Insider about the Reds’ 2022-23 merchandise roll-out
Liverpool announced the pre-sale launch of the new Nike-made home kit last Thursday (5 May).
Nike replaced New Balance as Liverpool’s technical sponsor ahead of the 2019-20 campaign in a five-year deal.
It was widely reported at the time that the Merseysiders had accepted a lower than normal base rate in exchange for a greater cut of royalties.
But Plumley claims that the deal, which he suggests is worth £350m over its five-season lifespan, is still largely weighted towards the flat fee decided at the outset of the contract.
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“The dynamics of this one are a little bit different but the main points are the same,” the Sheffield Hallam University expert told Football Insider’s Adam Williams.
“The Nike deal is significant. That’s where they get the bulk of their money from. It’s worth about £70m per season.
“Shirt sales are less lucrative for the club and more lucrative for Nike. Clubs don’t make a lot of money on shirt sales. That is a bit of a myth in this industry.
“But there are clauses where clubs might have a few more per cent on units sold or provisos that will trigger when they hit a certain number of sales. But you really have to sell a lot to make that pay.
“That is why the deal with the supplier is so significant. The idea that shirt sales pay for signings is nonsense.”
Liverpool trousered £217m from sponsor and merchandising streams in 2020-21.
Football Insider revealed last month (22 April) that they are also in talks with several firms about a potential new front-of-shirt deal.