Cost of kit and sponsorship deals rises rapidly
The cost of football kit and sponsorship deals has been rising rapidly. Manchester United set the tone when it switched from Nike to Adidas kits in 2015, in a deal worth around £75m a year. Barcelona did even better. By extending its Nike kit deal last month, the club more than doubled its annual revenue from kit to €150m a year.
Total shirt sponsorship fees earned by clubs in Europe's top six divisions have more than doubled since 2010 to €830m last year, according to sports consultancy Repucom. Revenue increased 45 per cent in the last two years alone. The Premier League takes the largest chunk of that, roughly the same as the combined revenues of the Bundesliga, La Liga and Serie A.
Those in rights management say that football's pull as a live spectator sport with a broad and dedicated global following has given it a special place in internatonal marketing. Audiences are become fragmented and diversified, so anything that gives an opportunity to reach a mass audience is especially welcome.
Over 80 per cent of the sponsorship fees brought in by Premier League clubs are from brands with little or no presence in the UK. For example, Manchester United have an Indonesian sports drinks partner.
Challenger brands such as Under Armour and New Balance have pushed up the competition for kit deals, as they use football sponsorship to build relationships with retailers and expand their distribution networks.
Mega deals involving kit supply remain the preserve of a select handful of elite clubs with a global presence. Arsenal's deal with Puma at €40m-€50m is more than double that of North London rivals Tottenham Hotspur.
Chelsea paid to end its deal with Adidas six years early so that it could seek more money elsewhere. Last month, it agreed a contract with Nike more than double its previous arrangement.
A typical lower half of the Premier League team may give away their shirt manufacturing rights for nothing and simply take a slice of the profits from shirts sold to supporters. Leicester City's kit maker Puma probably had a bargain basement deal.
Expectations are growing and performance clauses are becoming increasingly common. The fee paid by Adidas to Manchester United will drop by 30 per cent if they fail to qualify for the Champions League for more than two years running.