Adidas gives Manchester United a record $1.2 billion deal following Yeezy controversy.
Adidas gives Manchester United a record $1.2 billion deal following Yeezy controversy.
Adidas Extends Partnership with Manchester United, in a Billion Dollar Deal
Adidas, the iconic sportswear giant, has announced an extension of its partnership with Manchester United, one of the most esteemed football clubs in the world. This new agreement, which extends the deal for a further ten years until June 2035, is set to be worth a staggering £900 million pounds sterling, or nearly $1.2 billion. The landmark deal represents a 20% markup over the previous ten-year agreement between the two parties, which saw Adidas replace Nike as the official kit supplier for the Red Devils.
“We look forward to continuing our partnership with one of the most iconic clubs in football,” said Adidas CEO Bjørn Gulden in a statement sent to ANBLE on Monday. With this deal, Adidas aims to strengthen its association with Manchester United, capitalizing on the club’s popularity and global reach in the footballing world.
Adidas’ Quest for Quick Revenue
This lucrative agreement comes at a crucial time for Adidas, as the company seeks to generate fresh revenue following the discontinuation of its line of athletic shoes developed in partnership with Kanye West, known as Yeezy. The move came after a series of controversial and anti-Semitic remarks made by the artist. It is estimated that Yeezy accounted for approximately 10% of Adidas’ turnover.
Initially considering destroying $1.3 billion worth of remaining Yeezy inventory, Adidas ultimately decided on the more profitable route of selling the goods. The company has stated that it will donate a portion of the proceeds to charity, but has not provided specific details. This strategic move provided a much-needed boost to Adidas’ quarterly results, leading the company to revise its annual sales forecast to reflect a less significant decline in turnover. Furthermore, a new wave of inventory is set to be released on August 2nd, further contributing to Adidas’ recovery.
This partnership extension with Manchester United is a calculated risk for Adidas. The future of the club is looking brighter, as they are set to return to the highly lucrative Champions League for the upcoming season. Additionally, reports suggest that influential figures such as Sheikh Jassim of Qatar and billionaire Jim Ratcliffe of Ineos, are vying for future control of the club.
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Manchester United’s fortunes have also seen a positive turn with the Glazer family, owners of the club, announcing their intention to sell their ownership stake. This announcement has resulted in a near doubling of shares in the club, as the Glazers have been heavily criticized by loyal fans for their mismanagement of the once proud institution.
Meanwhile, bitter rival Puma, founded by Adi Dassler’s estranged brother Rudolf, has witnessed a surge in the value of its kit partnership with Manchester City, a fierce competitor of Manchester United. Under the ownership of Sheikh Mansour from Abu Dhabi and the management of Pep Guardiola, Manchester City achieved an unprecedented triple, winning the Premier League title, the FA Cup, and the Champions League last season.
Overall, the extended partnership between Adidas and Manchester United represents a significant milestone in the world of sports sponsorship and branding. The deal not only solidifies Manchester United’s position as a powerhouse in global football but also serves as a crucial revenue stream for Adidas. This agreement demonstrates the continued importance of strong partnerships in the fast-paced and competitive sporting industry.
