Manchester United has reached a ten year agreement with Adidas for a global technical sponsorship and dual branded licensing deal for a minimum guarantee of 50 million, subject to certain adjustments, beginning with the 2015/2016 campaign. For the 2014/2015 season, Nike will continue in its role of technical sponsor and trademark licensee.
Nike has held the contract since 2002, when it agreed to pay a minimum of 03 million over 13 years plus half of annual profits from the club's merchandising and licensing operations. Nike also provides the team’s soccer kits and runs its stores in England, Singapore, Macau, Thailand and India under the agreement.
Manchester United, which claims to have 659 million followers world wide is widely recognized to be one of the world's most valuable sports franchise. The company reported record annual revenue of 63.2 million in the fiscal year ended June 30, 2013, including 8.6 million from its retail, merchandising, apparel and product licensing deal with Nike.
Adidas will take over that role beginning with the 2015/2016 campaign subject to certain adjustments.
While MANU’s Nike revenues grew 14.2 percent in fiscal 2013, they were essential flat through the first three quarters of the current fiscal year.
As reported, Nike indicated last week it would not renew its 13-year contract to sponsor the uniforms of English soccer giant Manchester United when it expires at the end of next season, reportedly due to the contract's expanding cost. Nike paid Manchester United about $519 million in 2002 for the rights.
"We are excited to team up with Manchester United, one of the most successful and most loved football clubs globally. Our new partnership with Manchester United clearly underlines our leadership in football and will help us to further strengthen our position in key markets around the world. At the same time, this collaboration marks a milestone for us when it comes to merchandising potential. We expect total sales to reach 1.5 billion GBP during the duration of our partnership,: said
"We are excited to team up with Manchester United, one of the most successful and most loved football clubs globally. Our new partnership with Manchester United clearly underlines our leadership in football and will help us to further strengthen our position in key markets around the world. At the same time, this collaboration marks a milestone for us when it comes to merchandising potential. We expect total sales to reach 1.5 billion GBP during the duration of our partnership," said Herbert Hainer, Adidas Group CEO.
As part of the agreement, Adidas will supply product to Manchester United and outfit all of the club’s teams. In addition, Adidas will have the exclusive right to distribute dual-branded merchandising products worldwide.
Adidas noted that Manchester United is one of the most popular and successful sports teams in the world. Through its 137-year heritage, Manchester United has won 62 trophies, enabling the club to develop the world’s leading sports brand and a global community of 659 million followers. The club has played 33 exhibition games in countries such as China, Japan and the United States in the last five years and all the club’s Premier League games since 1997/1998 have been sold out.
Manchester United joins the roster of Adidas football partners, including some of the world’s top clubs such as Real Madrid, FC Bayern Munich, Chelsea FC, AC Milan, Flamengo and also starting with the 2015/2016 season Juventus.
Adidas is the outfitter of yesterday’s two finalists in the 2014 FIFA World Cup, World Champion Germany and runner-up Argentina, and is also the partner of FIFA’s Adidas Golden Ball winner Leo Messi, Adidas Golden Boot winner James Rodriguez, and Adidas Golden Glove winner Manuel Neuer.
As global leader in football, Adidas is also the Official Partner of FIFA World Cup, the FIFA Confederations Cup, the UEFA Champions League, the UEFA Europa League and the UEFA European Championships. Some of the world’s best players on the Adidas roster are Leo Messi, Gareth Bale, Thomas Mer, Arjen Robben, James Rodriguez, Toni Kroos, Karim Benzema, Philipp Lahm and Bastian Schweinsteiger.
