A number of the biggest clubs in football are currently in the process of negotiating new kit sponsorship deals, sparking bidding wars among the world’s biggest sportswear manufacturers.
That deal smashes Arsenal’s previous agreement with Puma, although is still dwarfed by Manchester United’s kit deal with Adidas, which is set at £750m over ten years.
Meanwhile in November, news broke that Real Madrid are in talks to sign a world-record deal with Adidas, which will earn them £1bn over the next decade, eclipsing the agreement their bitter rivals Barcelona reached with Nike.
But where do these deals rank among the top twenty football kit sponsorship deals in history? Check the below gallery to find out.
Last season, The Independent spoke to Jake Cohen, a sports lawyer who has worked on a number of high-profile transactions in football, to find out exactly how important kit sponsorship deals are to football teams across the world.
“Kit deals are not traditional sponsorship deals – they are licensing deals, which enable the kit manufacturers to use the club’s brand to sell branded apparel,” he explained. “Clubs will traditionally receive an annual fee – for example, Manchester United receives £75 million per year from Adidas, Chelsea receives an initial £60 million per year from Nike, and Arsenal receives £30 million per year from Puma – and then 10-15% of the revenue the kit manufacturer generates from shirt sales.
“The kit deal is often a football club’s most lucrative sponsorship, and for good reason. The manufacturers aren’t paying the clubs to have a tiny logo emblazoned on the front of the club’s shirt – rather, they’re making an investment that will yield an excellent return. As an example, Adidas CEO Herbert Hainer projected that Adidas would earn £1.5 billion from its ten-year, £750 million deal with Manchester United.
“Why don’t football clubs simply manufacture their own shirts and keep 100% of the profits? The simple answer is because they’re football clubs, not kit manufacturers. They don’t have the global distribution networks necessary to manufacture, ship, and sell hundreds of thousands, or in some cases, millions of shirts each year. Many clubs even outsource the logistics of their online shops, which are miniscule operations compared to what is required to manufacture, distribute and market kits on a global scale.
“Football clubs don’t have access to these resources. Even the largest football clubs in the world are comparatively tiny businesses when it comes to the likes of Adidas and Nike. To put it in perspective, Nike has earned substantially more in three months (nearly £7 billion for March, April, and May 2017) than Chelsea have earned in its 112-year history.”
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