Business

Inter Miami’s Messi effect in four numbers with $1bn projected revenue for 2023

Since the Inter Miami CL $60 million per year Lionel Messi deal, the Major League Soccer (MLS) has been gaining both commercial and audience traffic running into millions of dollars.

The seven-time Ballon d’Or winner turned down a record offer of €400m ($436m) per year from Saudi Pro League side Al Hilal, opting instead to join Inter Miami in the MLS.

According to excerpt from a weekly Apple podcast (Top 50 in US Sports) by Joe Pompliano, entrepreneur and investor with special interest in sports, Inter Miami CL expects annual revenues to double in year one, and owner Jorge Mas says the club’s valuation could increase by more than $1 billion.

Here’s a breakdown of the numbers as tweeted by Pompliano via his official Twitter handle @JoePompliano

Social media growth

Lionel Messi has 480 million followers on Instagram, which would be the world’s 3rd largest country. That is why Inter Miami CF has added 11 million followers over the last 30 days.

Inter Miami now has more Instagram followers than the other 28 MLS teams combined — and they also have more followers than all US sports teams except three.

Most Followed US Sports Teams (IG)
1. Golden State Warriors: 31 million
2. Los Angeles Lakers: 23 million
3. Cleveland Cavaliers: 16 million
4. Inter Miami CF: 12 million

This is valuable because Inter Miami will now make tens of millions more on annual sponsorship deals.

And many of these followers will stay when Messi retires in a few years (Ex. the Cleveland Cavaliers still have the 3rd most followers despite LeBron leaving).

Apple TV’s MLS Season Pass

Lionel Messi was offered more than $1 billion from Saudi Arabia. But MLS could not offer that type of money, so they called up Apple and asked them to get creative.

Apple is important because they recently acquired the exclusive global broadcasting rights to MLS via a 10-year, $2.5 billion deal ($250 million per year). And adding Messi could make that look like a bargain.

So Apple decided to do something unprecedented and offered Lionel Messi a cut of every new MLS signup. This has never been done before.

And with Messi promoting the direct signup link to his 480 million Instagram followers and Google searches exploding for MLS Season pass, it’s safe to say Apple and Messi will each make tens of millions on this deal.

Increased shirt sales

Lionel Messi’s 480 million Instagram followers are valuable for social media reach. But more importantly, they buy stuff too.

For example, Lionel Messi was selling about 2 million shirts annually when he was at FC Barcelona.

And even if he ends up selling just 500,000 Inter Miami shirts this year, that’s still $100 million in sales.

Here’s the math:
500,000 shirts
x $200 price
————
= $100 million

And with clubs typically netting about 15% of the sales price, depending on where the shirt is sold, Inter Miami would make an extra $15 million from Messi’s shirt sales this year alone.

However, that’s not all because Adidas also helped increase the total offer to Lionel Messi by offering him a royalty on every MLS shirt he sells.

So, every time someone buys a Lionel Messi shirt from Inter Miami, he receives a cut of the sale from Adidas, which is estimated to be worth millions.

More revenue = higher valuation

Inter Miami did $56 million in revenue last year. But owner Jorge Mas expects the club to double revenue in Lionel Messi’s first year with the team.

Inter Miami CF revenue
• 2022: $56 million
• 2023: $110 million (projected)

Mas also said that the team’s valuation could reach $1.5 billion next year, a 150 percent increase from $600 million today.

Inter Miami CF Valuation
• 2022: $600 million
• 2023: $1.5 billion (projected)

That would make Inter Miami by far the most-valuable MLS club — up from the 11th most-valuable team today — and the US-based team would be more valuable than Premier League clubs like West Ham, Everton, Newcastle United, Aston Villa, and others.

In addition to revenue-sharing deals with Apple and Adidas, Lionel Messi is also receiving equity in Inter Miami CF, meaning he’ll participate in any financial upside he creates by joining the team.

So, while it’s true that MLS could not compete with Saudi Arabia’s $1 billion offer, the league worked with its partners to create a comprehensive compensation package that we have never seen before in sports.

And if the early results indicate anything, Lionel Messi might end up making just as much money in the United States as he would have in Saudi Arabia.

megamillion