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SBD Global/January 28, 2014/Marketing and Sponsorship

Arsenal Leaves Nike After 20 Years, Announces Five-Year, $250 Deal With Puma

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Arsenal CEO Ivan Gazidis announces his club's new Puma deal Monday.
Puma has agreed to a kit supply deal with Arsenal beginning July 1. Puma also acquires licensing rights for Arsenal-branded merchandise. The deal is the biggest ever for Puma and Arsenal (Puma). The five-year deal is worth £150M ($249M) (London TELEGRAPH, 1/27). REUTERS' Keith Weir noted Puma replaces Nike, which has "provided Arsenal's red and white shirts for the past two decades." The agreement "shows Puma's determination to re-establish itself as a core sports brand" under new CEO Bjoern Gulden after moving more into lifestyle and fashion (REUTERS, 1/27). MARKETING WEEK's Lara O'Reilly reported the deal "usurps the contract renewal Arsenal signed with Emirates airlines for shirt and stadium sponsorship" in '12, which is worth £150M over five years. Gulden: "Arsenal have been a key strategic target for Puma for a number of years now. Arsenal represents a major commercial and marketing opportunity to reinforce Puma’s credibility as a global sports brand, and we have full confidence the plans in place to activate this partnership will have a significant global impact." The club has earmarked '14 "as the start of a period in which its commercial revenues will grow sharply after renegotiating deals with a number of existing sponsors," including stadium sponsor Emirates (MARKETING WEEK, 1/27).

SPENDING CASH: In London, James Riach reported Arsenal Manager Arsène Wenger "is set to sign a new contract" and "will be given a huge transfer budget in the summer" following the Puma deal. Arsenal CEO Ivan Gazidis said, "The money from this deal will be available to the club from this summer" (GUARDIAN, 1/27). Also in London, Jeremy Wilson reported the deal will increase Arsenal's revenue by £22M ($36M). It is the biggest deal in English football history. However, ManU is "soon expected" to announce a £76.9M ($227M) deal with Nike. Barcelona and Real Madrid's current kit deals are worth £27M ($45M) and £31M ($51M), respectively (TELEGRAPH, 1/27). The BBC reported Cardiff City and Newcastle are the only other Premier League teams to have kit deals with Puma. Puma also supplies kits to the Bundesliga's Borussia Dortmund and Italy's national team (BBC, 1/27).

RARE OPPORTUNITY: In London, Roger Blitz wrote the deal marked a "rare opportunity for the German company to gain a foothold in the top European fooball club market. " One source "familiar with the industry" said,
"What Puma is able to get in the market is dependent on what Nike and Adidas don’t take.” Gulden said "the deal made good on a promise he made when he took over" the struggling company in the summer that he would "prioritise sports brands over lifestyle brands" (FINANCIAL TIMES, 1/27).
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