It sounds crazy, but I just read an article about a star athlete who turned down a $1.7B contract (salary of $400M/year) for a deal that gave him a salary of close to $60M a year. WTH? The star is Lionel Messi, who will soon play soccer (sorry, football) at Inter Miami in the MLS. Admittedly, I’m not a soccer fan, but when I heard about this deal, I realized I need to get more interested.
I first heard about Messi’s deal from a social media influencer, kanekallawy. Afterward, I had to dive in to understand why someone would turn down such a lucrative offer. I wasn’t disappointed.
To call Lionel Messi a soccer star would be an understatement. He’s a 2022 World Cup champion and seven-time FIFA Ballon d’Or winner who’s played for Barcelona for almost two decades and, more recently, Paris Saint-Germain. He also plays internationally with Argentina.
As his contract with Paris Saint-Germain wound down, he contemplated his options: One path led back to Barcelona, while another had him playing in Saudi Arabia. In a joint interview with Mundo Deportivo and Sport, he stated, “I wanted to leave Europe, get out of the spotlight, and think more of my family.”
The problem was, he had a reported offer from Saudi Arabia to make $400M a year in a contract worth $1.7B. How do you walk away from that? Who could even match it?
To put that amount into perspective, the highest-paid MLS player was Chicago Fire’s Xherdan Shaqiri, with an annual guaranteed salary of $8.2M. Let’s compare that to other sports: In the MLB, the Los Angeles Angels’ Shohei Ohtani makes $70M a year. In the NFL, the Baltimore Ravens’ Lamar Jackson makes $52M a year, as does Stephen Curry of the NBA’s Golden State Warriors. And in the NHL, Connor McDavid makes $12.5M a year. So, $400M is pretty good.
It was clear that Messi wanted out of Europe, but there’s no way Inter Miami could come close to the Saudis’ offer, so it was time to get creative. Fortunately for Inter Miami, David Beckham is president and co-owner. Beckham was part of a creative deal when he joined the Los Angeles Galaxy. In fact, it was so creative, MLS made a rule called The Beckham Rule, by which teams can acquire players outside of the salary cap. That opened the door for Beckham to negotiate an option to buy an MLS expansion team. The team he bought was Inter Miami.
So, the stage was set — a motivated superstar wanting a change, a president/co-owner who knew how to get creative, and a few companies (Apple, Adidas, MLS) that wanted to capitalize on bringing Messi to the league. This is how you walk away from $1.7B.
As for the deal itself, it’s reported to look something like this:
- Nearly $60M/year in salary
- A share of Apple’s MLS League Pass streaming revenue (Apple paid $2.5B to MLS for the league’s streaming rights)
- A profit share with Adidas of all MLS apparel they sell (not just Messi’s stuff, but all MLS apparel)
- The option to buy an ownership stake in an MLS team after he’s done playing (sound familiar?)
Many experts believe that the Saudi deal would likely have paled in comparison to Messi’s final contract.
I’m often asked, “How do you measure a good deal?” Any deal that everyone is happy with is a good deal. In this case, Messi got his payday, MLS and Inter Miami got the sport’s biggest star, and Apple and Adidas increased MLS’s exposure, which will lead to greater revenues. It seems like a win-win-win-win-win scenario.
The keys to this deal:
- Knowing the underlying motivators of all parties involved.
- Creativity and thinking beyond standard variables.
- Patience — this deal took nearly three years to pull together.
Congrats, Messi! You may have turned me into a soccer fan — or, at the very least, an admirer of your deal. Well done.
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