40 million euros. That’s the rough amount Roma needs to come up with in player sales to break even each summer, after inking the Qatar Airways and Hyundai deals in 2018. Monchi proactively bridged that gap with the Alisson and Kevin Strootman sales (among others like Ponce and potential sales of Defrel, Peres) rolled over to summer 2019, but the club will still have to sell a player or two to fund their summer mercato.
On that very front, Roma made the move to keep raising revenues elsewhere this week. The club are looking to re-do their deal with Nike, having bought out Nike’s Roma venture in the capital itself, and seizing back ownership of the club’s merchandising rights.
From Selling Rights to Re-Selling Shirts
Roma’s reported takeover of As Roma Merchandising - a company founded in Rome by Nike when the kit supplier first agreed to sponsor Roma back in 2013 - mimics the new way Juventus have been doing business with Adidas. Before this week, if you wanted to license any kind of merch with Roma’s logo or name on it, you’d have to go through Nike.
This is the way clubs have been signing over their rights to kit suppliers through the commercial explosion of football this side of the millenium. Fundamentally, clubs were aware they could not afford to try their hand at becoming global retailers overnight.
Juventus were offered a 6 million-euro-a-year advance by Adidas to sign over their rights to the German manufacturers back in 2014, but chose to give back the upfront money in exchange for buying and re-selling their own kits instead. Juventus also took over Adidas’ company in Turin itself - Juventus Merchandising - and renamed the company Piemonte Merchandising while taking over all the official store contracts.
The official Juve store staff were effectively told by the Agnelli family: You work for us now.
Roma look on these developments from afar with envy, previously stuck and making little headway in their 5-million-a-year deal with kit sponsor Nike. The 10-year sponsorship was unsatisfactory enough that Roma chairman James Pallotta publicly claimed the deal was a mistake on many levels.
Pallotta on Nike kit deal question: 'Short term, we're not happy with the amount of production Nike is putting out there."— AS Roma English (@ASRomaEN) June 16, 2015
Pallotta: "Nike are producing spectacular kits but we need better distribution."— AS Roma English (@ASRomaEN) June 16, 2015
But why are Juventus (and other clubs like Barcelona) so confident they can now sell their own shirts instead of leaving the shirt business to the experts?
And why are Roma - a considerably smaller club in terms of world renown - now confident enough to take the same gamble?
New Club Confidence Thanks to Internet Pre-Orders
The tempting answer to Juventus’ merchandise success - and wondering if Roma would be fools to try and copy it - is Cristiano Ronaldo. But Juventus’ newfound shirt revenue stretches back 2015-16 when they first turned down upfront money from Adidas to own their own masters again.
Since 2015-16, Juventus has reported net merchandising incomes of 9.2 million euros (summer 2016), 10.91 million euros (summer 2017) and 16.32 million euros (summer 2018) according to Calcio e Finanza.
In other words, Juventus have gone from an immediate 30% increase in revenue to a 166% increase over the 6-million-a-year shirt deal they originally agreed with Adidas.
Most of it this was down to the club rebranding itself as “J” - a move derided in the stands but inarguably of benefit to Juventus on the bottom line since the change. And then came the CR7 launch event this past summer.
More than just being a re-seller, now Juventus promoted the one-time special event of Ronaldo’s shirt launching in the official Juventus store. Thanks to internet commerce, the club could take pre-orders of shirts before ever having to buy the shirts themselves from Adidas and subsequently re-selling them in club stores to meet fan orders.
Juventus - as a promoter - had proven they could manage (and in some ways skip) the traditional risks of getting into the bricks-and-mortar retail business.
It’s believed (if you can believe Reddit) this approach delivered Juventus as much as 41 million euros gross income in shirt sales, on launch-day alone. Signing megastar players aside, Roma has now decided she wants some of that action.
#ASRoma become the first Italian club to sign a partnership with @Twitter!— AS Roma English (@ASRomaEN) December 18, 2018
➡️ https://t.co/QFR7VvOlXL pic.twitter.com/DhgdsXGgDQ
Roma announced the hiring of Francesco Calvo as Roma’s Chief Revenue Officer in the very same summer of 2018. The former Barcelona and Juventus director has a track record for success at both clubs, and his first major move was to strike up a partnership between Roma and Twitter to keep expanding the club’s internet presence. Calvo followed that up with a partnership announced between Roma and Snapchat today, with the club agreeing to host their own weekly show on the social network.
The play here looks like Roma want to get youngest potential Roma fans’ attention through their mobile phones, then sell shirts to them over the web through the family peer pressure.
Realistically, it will be at least one season or more until we see the difference this move - combined with this week’s re-doing the way Roma sells her merchandise - makes to club revenues and bottom line. Evidently the club feel the shot at raising merchandising income from 5 million to around potentially 13 million a year cannot be ignored.
We also know that Roma won’t be signing one of the football world’s biggest stars to their playing squad like Juventus, given the ‘We Are The Borg’ collectivist approach of the Monchi era, so the Lupi will need more of their club director, ambassador and icon Francesco Totti to make this move count on a global level.