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Nike and Adidas are the two names that first tend to come to mind when discussing football kit sponsors. They are the two titans, the fierce rivals and the biggest spenders. It was announced recently that Manchester United will be dropping Nike, from the end of the 2014/15 season, in favour of a lucrative deal with Adidas. This is a significant blow to Nike but one that they can stomach as long as this does not kickstart an exodus of major teams; they still have Man City, PSG and Barcelona on their books after all.
Current club contracts
The table on the right shows a projected timeline of the contract details between kit suppliers and the world’s top clubs (based on revenue from the 2012/13 season). Adidas are responsible for producing uniforms for 60% of the biggest clubs, whilst Nike and Puma are next in line, with 30% and 10% respectively.
United’s deal with Adidas is the largest sponsorship deal in the history of sport with the staggering figure around the £750m mark. This will doubtless make other major clubs step up and take notice, the realisation that they can cash in even further following this new benchmark is bound to set some corporate hearts racing.
Will anyone break the United/Adidas record?
Real Madrid, known affectionately as the Galacticos, are a club for which prestige and being the best, the biggest and the brightest is everything. This mentality, coupled with a history of loyalty to Adidas, the firm have been producing their kits since 1998, is proof that if anyone is to surpass United’s recent sponsorship deal, Real Madrid are a safe estimate. The club’s current deal expires in 2020.
Barcelona have one of the top selling kits worldwide; the charming mixture of success, big names and attractive colours is evidently irresistible to many. They have enjoyed significant on-pitch success since their last sponsorship deal, and when they next sign one, in 2018, you can be rest assured it’s going to involve a large sum of money. Whether they will match the figure that Man Utd were able to negotiate with Adidas remains to be seen, and indeed is unlikely, but it will certainly contribute to the final fee.
Adidas hold an even more special relationship with Bayern Munich than they do Real Madrid. Theirs is the longest ongoing contract between kit supplier and club, one which goes back to 1966 and is due for a renewal in 2020. Yet another reason it’s highly unlikely that the German champions will change suit is that Adidas have a stake of just under 10% in the club, though a deal which breaks United’s in terms of value is highly unlikely.
The Barclays Premier League is the most valuable in the world by a significant margin, and this was recently reflected in the announcement of the expectations of the new deal for television rights. (http://www.sbcnews.co.uk/featurednews/)
It is undeniable that presence in this league escalates kit sponsorship deals and as such despite comparatively weaker on-pitch success, Premiership clubs can demand far higher fees than their European rivals. Chelsea, Man City and Arsenal will all have the Man Utd/Adidas platform upon which to begin negotiations with potential kit suppliers when their deals expire. The huge sums involved in supplying a major team’s kits however could have the impact of opening up the market to other brands such as Under Armor, Warrior/New Balance and Macron. Even brands such as Adidas and Nike are unlikely to be able to cover numerous teams should the costs be anywhere near £750m.
Finally, over in Ligue 1, PSG are the newcomer in terms of the world’s major clubs since the Qatari Investment Authority bought a controlling stake in 2011. The aim was to change the identity and fortunes of the club, and transform them into a major player worldwide. It appears to be keeping to its word with revenues increasing five-fold between 2009/10 and 2012/13. They’ve also attracted big names to the club, and the type of names which sell shirts such as Beckham, Ibrahimovic and Luiz. If the Parisian club continue to grow at such a rate, it is inevitable that they will be in a strong position to demand a sizable sum during their next contract negotiations in 2023.
The deal between United and Adidas will not be surpassed for a few years, but if Florentino Perez has anything to say about it, 2020 might see a new sponsorship deal record broken.
