Extortionate Cost of Replica Football Kits

Now that the World Cup is underway and the new league season just around the corner, we highlight the exorbitant cost of children’s replica football shirts and the scandalous unwillingness of politicians to do anything about this national disgrace.

Each summer the media fill their print copy and websites with details of the ever increasing costs of replica football kits. Despite such coverage there has been a general apathy among politicians to get involved. Very occasionally those in power have thought it might be a vote winner to speak out, such as David Cameron, the then Prime Minister prior to the 2014 World Cup who was reported to have ‘waded in’ to the debate on the high cost of England replica shirts[1]. He suggested that Nike might like to think about lowering its prices. This wasn’t so much wading in, more dipping a toe in the poisonous pool of avaricious corporate giants, hoping not to be bitten. Needless to say Nike treated the PM’s remarks with disdain and completely ignored his suggestion.

Recently, Dr. Peter Rohlmann, a sports merchandising expert carried out a study of the breakdown of the income and expenditure involved the market of replica shirts[2]. He found that the manufacturers’ costs of material, labour and shipping were less than £5 per shirt, so a top selling for £50 is a 1000% mark up on costs. Perhaps the one surprising finding from Dr. Rohlmann’s report is that the clubs themselves merely receive around 6% of the price of the shirt, that is £3 on a top retailing for £50. However, this is certainly no small change when we note that in 2016 alone Manchester United shifted an incredible 2,850,000 tops. And the clubs are generating ever more money from shirt sponsors, with one corporate name emblazoned across the front, a different company name occupying the reverse and now a third sponsor appearing on the sleeve! These funds are in addition to the revenue clubs receive from the kit manufacturers themselves. Adidas is currently paying Manchester United £750m for privilege of producing their kits! They need a return on their investment and the supporters end up footing the bill. Yet, even these huge sums appear like petty cash on the balance sheet compared with the gargantuan guaranteed revenue from the sale of TV rights. The Premier League in England has just signed a deal with TV companies worth a barely believable £5.13bn.

The poor consumer may be forgiven for believing that the clubs, manufacturers and retailers operate a cartel, ensuring that the sale price remains artificially and astronomically high. In fact, back in 2005 that’s exactly what the Competition Appeal Tribunal said, after upholding a decision by the Office of Fair Trading which found evidence of price-fixing. Fines totaling more than £16m were imposed on Manchester United, Umbro, JD Sports, JJB Sports and other retailers as well as the Football Association[3].

As Dr. Rohlmann has shown the biggest slice of the pie is devoured up by the retailers, who claim a massive 37% of the sale price, that’s over £18 on the £50 shirt. The two largest retailers in the U.K. are JD Sports and Sports Direct, the latter owned by Mike Ashley. JD Sports posted pre-tax profits last year of £294.5m an astonishing rise of 24% on the previous year. Ashley’s record is hardly inspiring. Recently his company was found to have been paying some employees less than the basic minimum wage[4].

The research findings show that manufacturers claim an unhealthy 26% of the price (£12.76 on the £50 shirt). By far the two largest suppliers of football shirts are Adidas and Nike. At this year’s World Cup Adidas and Nike are providing 22 out of the 32 national strips. These two corporate giants share a similar slice of the domestic and European clubs’ markets.

The 2018/2019 Real Madrid junior home shirt manufactured by Adidas retails for around £50. The yet to be released Manchester United shirt, also by Adidas, will retail for at least that figure, but in all likelihood the price will be greater still. This is just the price of the shirt. Be prepared to fork out another £25 for the shorts and £10 for the socks, bringing the total cost of a child’s strip to an eye- watering £85. If your child wants his favourite’s name and number on the top don’t expect much change from £100.

The new season Barcelona junior shirt manufactured by Nike is available to buy for a similar cost of £50. The 2018/2019 Tottenham Hotspur child’s top, again produced by Nike, will cost at

least this amount. Last season Manchester City may have a run away with the title, but United and Spurs came joint top of the league for the most expensive replica shirts. And yet there’s no longer any price-fixing? Adidas claim that it is up to the retailer to set the ultimate price, but that neither justifies nor explains their own pricing policy. Replica shirts on the Adidas website are every bit as expensive as those sold elsewhere. Nike state that their prices are similar to those of other manufacturers, but that is obviously because they, like Adidas, are operating a virtual cartel. They have a monopoly on these shirts with the result that they exploit fans’ loyalty with extortionate prices.

It is little wonder that so many parents resort to buying counterfeit shirts. Those in authority warn parents against this practice for a number of reasons: counterfeit shirts are illegal; they infringe trademark; they are of poor quality (or rather, poorer quality than the flimsy material of authentic shirts); they are produced by workers often in dangerous conditions; and in most cases the proceeds end up going towards organised criminal gangs, both here and abroad. If children’s replica shirts were sold at a reasonable price then the market for such counterfeit goods would disappear.

You don’t have to buy these shirts; no one is forcing you to do so, I hear you scream. Yet, that is missing the point. The consumer is being ripped off. Parents come under pressure from their kids wanting the latest strip. Kids themselves come under peer pressure from others at school. A child may collect all his savings and go excitedly to the sports shop to buy a kit. The nice assistant cannot be more helpful as he relieves the child of all his money in exchange for some slight pieces of polyester.

The Scottish Government has achieved minimum pricing legislation in relation to alcohol. Surely it is time Parliament tackled the extortion scandal of replica football shirts by introducing maximum pricing legislation. Is the lack of a political will more to do with self-interest; that successive governments don’t want to intervene due to the revenue they themselves amass from such sales? In the absence of any form of political pressure manufacturers and retailers will continue to fleece the consumer. Supporters may yet come together and adopt a mass boycott. Then the manufacturers and retailers will have to take note

 

[1] https://www.telegraph.co.uk/news/politics/david-cameron/10739105/David-Cameron-90-England-shirt-is-too-expensive.html

[2] https://www.mirror.co.uk/sport/football/news/replica-football-shirts-rip-fans-7455562

[3] http://news.bbc.co.uk/1/hi/business/4565683.stm

[4] https://www.jdplc.com/investor-relations/key-financial-information.aspx