SBD/July 9, 2014/Marketing and Sponsorship

Adidas On Cusp Of 10-Year, $1.3B Kit Deal With Manchester United

Manchester United's kit deal with Nike comes to an end after 13 years
adidas "is primed to sign" a 10-year kit deal with EPL club Manchester United that could be worth up to $1.3B (all figures U.S.) after rival Nike "declined to match the German company’s offer," according to Roger Blitz of the FINANCIAL TIMES. Months of talks between Nike and the club to extend its 13-year kit deal ended with a statement from the company saying the terms on offer "did not represent good value for Nike’s shareholders." Nike "was given a period of exclusivity to extend the deal, but when this expired United approached rival companies." Nike "still had the right to match any competing offer." If ManU finalizes the deal with adidas, it is "likely to be the biggest" in soccer and "worth more than double Real Madrid’s deal with the company." The size of the deal "underlines the fight for supremacy" between Nike and adidas in the sport (FINANCIAL TIMES, 7/9). ESPN.com's Darren Rovell noted Nike, which had been making ManU's kit since '02 and was paying about $40M a year on the deal, recently announced that soccer revenue for the company "was up" 21% to $2.3B in the last fiscal year. From July '13-March '14, publicly traded ManU "pulled in" $48.2M in retail, merchandising, apparel and product licensing revenue (ESPNFC.com, 7/8). The WALL STREET JOURNAL's Sara Germano noted New Balance subsidiary Warrior Sports also "expressed interest in sponsoring" ManU (WSJ.com, 7/8).
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