Sportswear giant Adidas has signed a £750m deal to make Manchester United’s kit for 10 years from next season.
It comes after US rivals Nike decided to end their association at the end of the coming 2014-15 season.
Nike have been paying United £23.5m a year, and the new deal is worth a world record-breaking £75m a season to the Old Trafford club.
Champions League winner Real Madrid’s £31m-a-year deal with Adidas was previously the biggest club deal.
Adidas will provide training and playing kit to all of the club’s teams. In addition, it will have the exclusive right to distribute dual-branded merchandising products worldwide.
The huge sum involved is only £40m less than the Glazer family paid for the club in 2005.
Sales boost
Adidas chief executive Herbert Hainer said the deal would help the firm “to further strengthen our position in key markets around the world”.
“We expect total sales to reach £1.5bn during the duration of our partnership,” he added.
It will be the first time Adidas has made the Premier League’s team’s strip for 23 years, since the 1991-92 season.
The announcement comes a day after the German firm, a Fifa World Cup sponsor, provided the playing kit for both teams in the 2014 final, Germany and Argentina.
In midday trade on the German stock exchange, the firm’s shares were up by 2.78%.
Other teams supplied by the firm include Bayern Munich, Chelsea, AC Milan, Flamengo and – from the 2015/2016 season – Juventus.
‘Robust’
Sean Hamil, director of the Sport Business Centre at London’s Birkbeck College, said that although the Glazers had taken flak over the way they had put debt onto the club books, and increased season ticket prices, they had also put in place an “an exceptional marketing and sponsorship team”.
“They have been able to secure this landmark deal in the sector, against the background of no Champions League football next season,” he said.
“This is clearly a major vote of confidence in the Manchester United brand.
“Also it shows that leading English clubs are sufficiently robust in terms of global appeal that sponsors are making value decisions based on the long term and not just around one season.”
‘Global position’
Dr Leah Donlan, a marketing expert at Manchester Business School, said the deal will give Adidas “a significant competitive advantage” over Nike.
She added that Adidas could “strengthen its global brand position” by adding Manchester United to its portfolio of teams.
Nike had been given a period of exclusivity to negotiate an extension with United and also retained the right to match any other offer.
But the company decided against exercising either option, claiming the terms “did not represent good value for Nike’s shareholders”.
Manchester United suffered its worst Premier League finish to date last season after manager Sir Alex Ferguson left following 26 years in the job.
BBC
