Nike Scores Jersey Deal With EPL's Liverpool
January 07 2020 - 11:20AM
Dow Jones News
By Sara Germano
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 07, 2020 11:05 ET (16:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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