In May 2021, one of the best soccer players in the world announced he was coming to play Major League Soccer (MLS). Lionel Messi, currently 36 years old, rejected a record-breaking $400 million a year in order to come to play for Inter Miami Football Club. Messi’s deal not only includes a paycheck of $50-60 million dollars a year, but also revenue from the streaming and apparel contracts with Apple and Adidas, who sponsor Major League Soccer.
Messi is earning a lot of money on this deal, but why should we care about it? It is worth seeing first how much money Messi’s signing earned his previous club, Paris Saint-Germain (PSG), in just two years of his being there. In the first year, Messi’s arrival generated €700 million, improving PSG’s income by 13 percent. After he left, PSG is set to lose €800 million in revenue and from sponsors not renewing their contracts.
From this, we can assume Inter Miami is going to benefit from similar amounts of revenue now that the Argentinian is moving there. Miami’s team is growing not only in social media following, but is investing in infrastructure. Messi is used to playing in huge stadiums; his home venue in Barcelona had a 99,000-seat capacity and Paris, 48,000. Now he is going to play in an 18,000-seat stadium for the first year, limiting the number of fans who can see him play. Nonetheless, the club has announced plans to expand to a 25,000-seat stadium, which is projected to create 15,000 direct and indirect new jobs. This is just the tip of the iceberg of investment coming to the soccer league in the US, thanks to this big signing.
Immediately after Messi’s announcement, ticket prices to see the Miami-based team skyrocketed. The average ticket price of $152 before the Argentinian was linked to this team is now up to $935. An average ticket for his predicted debut on July 21 is up 922 percent, with the highest ticket going for $20,350. Each game in which Messi is expected to make an appearance is currently sold out, even those that are not going to be played in Florida. Many would argue that this is problematic for the average fan who is not able to afford to pay for tickets. Is it fair that the die-hard fans, who have consistently been going to games, now face extraordinary costs to see Messi? I am willing to make the controversial statement that it is. It is a good sign the market is clearing and the soccer market in the US is growing.
If we use basic economics, grounded on the extremely high demand all around the country, the only way in which a still-growing league like the MLS can accommodate this demand is by raising prices for the limited tickets available. Even though Miami has placed 19th, 20th, and 12th in the last three seasons, fans are undoubtedly not paying to see the team itself, but the Argentinian Astro.
Messi’s starting his American adventure is beneficial not only for Inter Miami, who are making loads of cash now, but for fans in the US overall. There’s no doubt the higher prices will keep on changing thanks to resellers, but they will lead to those who value the experience the most to get them. Even fans who do not get to see Messi play will benefit, because more investment is coming into the league. Apple TV is expanding its reach to more fans and investing more money into the league. Other European superstars are rumored to potentially follow Messi’s steps and make a move to the MLS.
The US is set to host the Copa America and, more importantly, the 2026 World Cup. This is huge for the sport and the country, because the last country that hosted the World Cup had a shocking $5.4 billion in revenue. For American fans, seeing the local soccer league grow before the next World Cup is great, because the majority of the national team plays locally. Messi will not carry MLS on his own, but the investment he’s bringing will have an important impact. Fans, whether directly or indirectly, and whether they can see Messi play in person or not, are the biggest winners of this deal.
The post Messi is Moving to Miami: Who’s the Biggest Winner? was first published by the American Institute for Economic Research (AIER), and is republished here with permission. Please support their efforts.