Adidas scores deal with Manchester United
Thought the end of the World Cup meant an end to international soccer news? Not just yet, at least in terms of financial headlines, as one of the top teams in England's Premier League announces a major change in its branding.
Manchester United (MANU) -- which might be thought of as the New York Yankees of professional soccer, at least when it comes to the number of championships it has won -- said Monday it had reached a 10-year agreement with Adidas (ADDYY).
The deal means that, starting with the 2015-16 season, the German sportswear company will become United's global sponsor and official licensing partner for what the team says is "a minimum guarantee" of 750 million British pounds, or nearly $1.3 billion U.S.
The agreement also ends the football club's long-standing relationship with Nike (NKE).
"We are excited to team up with Manchester United, one of the most successful and most loved football clubs globally," Adidas CEO Herbert Hainer said in a statement.
Hainer said the new collaboration would futher strengthen his company's position in key global makets, especially when it comes to Adidas' merchandising potential.
"We expect total sales to reach 1.5 billion GBP (or $2.56 billion) during the duration of our partnership," he noted.
For its part, Nike, which has sponsored Manchester United and supplied its football "kit," or uniforms, since 2002, had just last week acknowledged they couldn't accommodate the team's latest financial demands. Adidas will launch its new kit next summer, according to published reports.
"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," the company said in a statement to Reuters.
Manchester United was purchased in 2005 by American billionaire Malcolm Glazer, despite protests from the club's fan base. Glazer, who also owned the NFL's Tampa Bay Buccaneers, died in May, with his sons taking over both clubs' operations.