Liverpool ink kit supply deal with Nike
Jan 8, 2020
Premier League football club Liverpool FC, winner of the latest edition of the Champions League, announced on Tuesday that US sport giant Nike will be its kit supplier from the 2020-21 season.
The value of the contract between Liverpool and Nike was not specified but, according to British media, the Reds hope to pocket up to GBP70 million (€82.2 million) per season with this five-year deal ending in 2025, which includes an extremely significant variable component.
Since 2015, the Premier League club has been outfitted by another US sportswear company, New Balance. “Our iconic kit is a key part of our history and identity,” said Billy Hogan, Liverpool’s chief commercial officer.
“We welcome Nike into the Liverpool FC family as our new official kit supplier and expect them to be an incredible partner for the club, both at home and globally as we continue to expand our fan base,” he added.
Unlike the previous contract with New Balance, and the majority of the kit deals struck by Europe’s elite football clubs, Liverpool’s new deal provides for a relatively low fixed income but a much higher variable part.
In addition to a guaranteed minimum of GBP30 million (€35 million) per season, the Reds would pocket 20% of net merchandise sales, notably match jerseys, and earn various bonuses should they win the Champions League or clinch the Premier League title, according to British media.
Successful case against New Balance
“The difference is that clubs normally earn a 7.5% commission on the sale of game kit and other merchandise,” explained Kieran Maguire, a specialist in football economics, talking on Sky Sports.
“With the new Nike deal, Liverpool will earn 20%. The club closely analysed the figures and estimated it will earn more with Nike [than with New Balance],” he added.
Nevertheless, the figures remain distant from the €150 million raked in each season by FC Barcelona through their deal with Nike, or the €120 million netted by Real Madrid from Adidas.
To terminate the contract with New Balance and team up again with the US sport giant based in Eugene (Oregon), the club managed by Jürgen Klopp has had to go to court.
New Balance argued in fact that a clause in the contract with Liverpool allowed it to extend the deal by another five years if it matched a competitor’s bid. But a British court ruled in favour of Liverpool last October, recognising that New Balance does not have at its disposal the same worldwide distribution network and marketing resources that Nike offers.
Liverpool have not been crowned league champions since 1990, and are currently dominating the Premier League with a 13-point advantage over their nearest rivals, Leicester, and also have one game in hand.
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