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Nike Out, Adidas In: The Pull Of United

Seventh place? Well then, here's £750m

Written by . Published on July 17th 2014.

Nike Out, Adidas In: The Pull Of United

ADIDAS have given arch-nemesis Nike a kicking of late.

Amazingly, this gigantic Adidas deal is only £40m shy of the £790m the Glazer family paid for United back in 2005. 

As Germany dispensed of a woeful Brazil and Argentina saw off the Netherlands in the World Cup semi-finals, Nike marketing executives buried their heads in mountains of unsold £230 Nike Magista World Cup football boots.

Nations sporting Adidas, the German sportswear manufacturer, had dumped both nations wearing Nike, the American sportswear manufacturer, out of the World Cup. The final was to be an all-Adidas affair.

Rubbing salt in the wounds, both Lionel Messi, the World Cup Golden Ball winner (best player, questionably), and James Rodriguez, the World Cup Golden Boot winner (top scorer) are sponsored by Adidas.

Preceding that, Adidas-wearing Real Madrid gave Nike-wearing Atletico Madrid a 4-1 beating back in May 2014 during the Champions League final.

Germany lift the 2014 World Cup in AdidasGermany lift the 2014 World Cup in Adidas

According to Forbes, Adidas and Nike control over 70% of the football-related sportswear market, and despite Nike dominating Adidas in overall global sportswear revenues, it is Adidas that controls the football market.

Now Adidas have beaten down rivals Nike following a bidding war for a new sponsorship deal with Manchester United starting from beginning of the 2015/16 season.

Nike will continue as sponsor for the upcoming 2014/15 season, but recently pulled out of sponsorship negotiations with the club because United were reportedly demanding too much money, a Nike spokesperson said:

“Any partnership with a club or federation has to be mutually beneficial and the terms that were on offer for a renewed contract did not represent good value for Nike’s shareholders."

United's new kit deal with Adidias, worth £750million over the next ten years, is the largest ever kit sponsorship deal of its kind, according to the club.

Amazingly, this gigantic Adidas deal is only £40m shy of the £790m the Glazer family paid for United back in 2005.

United’s current deal with Nike, agreed in 2002, is worth £23.5m a year. The new Adidas deal at £75m a year is worth over three times that of the previous Nike deal.

United ChevroletUnited Chevrolet

On top of that, this season sees United partner with giant US car firm Chevrolet, netting the club a further £53m a season over the next seven seasons. Insurance company AON will also hand United £17m for the right to stick their logo on all the training gear.

Meaning from the beginning of the 2015/16 season, United will be raking in around £145m of kit sponsorship money alone. Further reports suggest that Uniqlo, the Japanese fashion firm and Novak Djokovic sponsor, are interested in joining United's sponsorship army.

To put the new deal in perspective, the amount offered by Adidas to United is more than twice as much as the sports manufacturer pay current European Champions Real Madrid (£31m).

Next in football's largest kit deals comes Chelsea (£30m), Arsenal (£30m), Barcelona (£27m), Liverpool (£25m) and Man City (£12). Meaning five of the top seven largest football kit deals belong to English clubs - testament to the huge global pull of the English Premier League.

So, having finished seventh last season - below Spurs and Everton - and without Champions League football this season, how have United managed to secure the largest kit deal in sporting history?

Aside from having Lucifer (known throughout the club as Ed) heading up the commericial team (that's a point, debt and annoying faces aside, dare we say that the Glazer's deserve some credit for putting together such a potent commericial engine?).

Firstly, for the past two decades United have dominated a league that continues to be the most watched football league in the world. Screened in 212 territories by 80 different broadcasters, the TV audience for the Premier League is estimated to be in the region of 4.5bn.

This has helped to amass, according to the club at least, over 659m Manchester United fans across the globe, making them the most supported football club in the world. Not only that, but a recent study suggests that United's fanbase has doubled in the last five years alone.

659m supporters means shirt sales - millions of them. And Adidas look set to make a fortune.

Herbert Hainer, Adidas Group chief executive said: "This collaboration marks a milestone for us when it comes to merchandising potential. We expect total sales to reach £1.5bn during the duration of our partnership.”

£1.5bn in United sales for Adidas in ten years? That's around 30m shirts (at £50 a shirt).

Old TraffordOld Trafford

This deal is a clear indicator that, regardless of the club's woeful 2013/14 season, United's stock has far from fallen. Globally the brand remains as robust as ever.

In fact, the new deal has catapulted United to once more become the world's most valuable football club, according to Wall Street.

Forbes now values the club at £2.1bn, jumping from third to first most valued club in the world, leaving Real Madrid (£2bn) and Barcelona (£1.88bn) in their wake.

Let's hope then that newly arrived manager, Louis Van Gaal, will be given a significant chunk of the new stash to splurge on signings and re-establish United at the top of English football (most sensible City fans will agree that this would be better for the city and much more tasty for derby days).

The club's owners, the Glazer family, have become pariahs amongst United fans for spending more on debt than on new talent. In total, nearly 700m has gone towards debt since their takeover in 2005, with only half of that spent on strengthening the squad.

It was reported back in May that Van Gaal would be handed a £150m transfer kitty - with £60m already dropped bringing in young-guns Luke Shaw from Southampton and Ander Herrera from Athletic Bilbao. Van Gaal is also rumoured to be close to a move for Arturo Vidal, the Juventus midfielder could cost the club in the region of £35m.

However, the £150m transfer purse handed to Van Gaal came before Adidas waded in with this gigantic £750m sponsorship offer. So surely another £50m wouldn't hurt would it Avram? Would it Louis? Would it Kev? Why... that's a full Di Maria.

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Louis Van GaalLouis Van Gaal

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