Ahead of the 2020/21 project, Liverpool approved a deal with sportswear giants Nike to sponsor their sets, taking over from previous sponsors New Balance.
The Premier League champs were desperate to get the partnership with Nike sealed, even after being taken to court by New Balance. However, New Balance were using the club ₤45 million each year in their offer, while Nike were providing just a ₤30 m annual rate.
Appears unusual? Why would any club battle tooth and nail to secure an offer that provides ₤15 m less annually? Well, there’s a bit more to it than that.
To Start With, Nike have actually also provided the Reds 20%of all earnings from licensed product sales. This implies that the sportswear company would need to sell ₤75 m worth of product to make up for the ₤15 m reduction.
Last season, the Daily Mail reported that Liverpool sold 1.7 million reproduction t-shirts. If we assume that each t-shirt costs typically around ₤50, that adds up to ₤85 m, currently making up the space– which’s simply on replica shirts alone.
But that’s not where the benefits end for the Merseyside club. The deal with Nike likewise provides amazing potential for development as a brand.
New Balance have 6.2 m Instagram followers, while Nike have 128 m. Over on Twitter, Nike have 8.3 m fans, while New Balance have 257,700 To put it merely, Nike are much, much larger.
Additionally, Nike have collaborations that permit Liverpool to tap into a brand-new market that they formerly weren’t able to. Nike’s client list includes basketball icon LeBron James, tennis super star Serena Williams, and rapper Drake.
Paris Saint-Germain recently did something similar, partnering with basketball hero Michael Jordan and his Air Jordan brand, with the star’s iconic ‘jumpman’ logo design appearing on the club’s third set.
The go for Liverpool is to catch up with competitors Manchester United, whose handle Adidas is worth a reported ₤75 m per year and is among the biggest football club sponsorships. The collaboration with New Balance was not sufficient to get them to this level, whereas this deal with Nike ought to get them taking on the Red Devils as an international brand name.