NKE Nike Inc

By Sara Germano 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 8, 2020).

Nike Inc. has signed a multiyear deal to be the official jersey provider for Liverpool Football Club, handing the current powerhouse of European soccer to the world's largest sportswear maker by revenue.

The agreement announced Tuesday follows a contentious court battle between the reigning Champions League titleholders and its current outfitter New Balance Athletics Inc. over contract terms that expire this year.

The deal represents the latest big-money sponsorship switch for one of Europe's top soccer clubs as sportswear makers seek to capitalize on the growing global appeal of the sport's biggest names. For Nike, the capture of Liverpool comes after rival team Manchester City defected to Puma SE this season.

Underscoring the cutthroat competition for soccer sponsorships, Boston-based New Balance had fought to retain its relationship with Liverpool -- the current runaway leader of the English Premier League -- citing a provision that allowed it to match any competing deal, but was ultimately unsuccessful.

The case in London, adjudicated in October, shed light on the often-secretive world of sports sponsorships, where it is common for top teams to seek more lucrative deals from competing brands.

According to the court judgment, Nike offered to pay Liverpool GBP30 million ($39.5 million) per season, plus 5% of net sales of licensed footwear and 20% net sales of all other licensed products. The company also promised to market Liverpool products with advertising featuring at least three "superstar athletes and influencers of the caliber of LeBron James, Serena Williams [and] Drake."

New Balance made a counterproposal but the presiding judge, Mr. Justice Teare, dismissed the sportswear maker's claim saying it hadn't adequately matched Nike's offer, partly because it omitted the named sports stars, as well as discrepancies in how licensed products would be distributed.

Terms of the deal announced Tuesday, which take effect on June 1, weren't disclosed. A spokesman for Nike declined to comment on whether they differed from terms described in the court case. Representatives for Liverpool and New Balance didn't immediately respond to requests for comment.

Billy Hogan, Liverpool's managing director and chief commercial officer, said in a statement that the club welcomed the deal and thought Nike would be a good partner at home and overseas as it continues to expand its global fan base.

Nike and New Balance have been at odds in sponsorship cases in the past. In 2016, Nike sued U.S. middle-distance runner Boris Berian for breach of contract by entering into a sponsorship agreement with New Balance in the run-up to that year's Summer Olympics. As with the Liverpool case, at issue was whether Nike had sufficiently matched a competing sponsorship offer from New Balance, though Nike ultimately dropped the lawsuit saying it wanted to "eliminate [the] distraction" for Mr. Berian ahead of the Games.

Write to Sara Germano at sara.germano@wsj.com

(END) Dow Jones Newswires

January 08, 2020 02:47 ET (07:47 GMT)

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