By the summer of 2020, Liverpool Football Club will be coming to the end of its current kit deal with New Balance.
Signed in 2015, the present arrangement sees the club earn £45 million per year with New Balance. Notably, that deal was agreed in 2015, months before Jurgen Klopp’s arrival at the club and the on-the-pitch revival The Reds have enjoyed as a result of the German’s leadership.
Liverpool FC has been one of the largest growing football ‘brands’ in the world in recent years after finally grasping the relevance of commercial leadership and change.
The club had fallen behind others such as Manchester United, both on and off the pitch, since the 1990s and something needed to be done to stop the gap between their respective revenue streams widening.
It could be argued the timing of the renegotiation of a new kit deal could not have been better for Liverpool’s owners, Fenway Sports Group (FSG). Liverpool have been on the world stage in the Champions League final just last May. This season they are currently top of the Premier League and, again, have already advanced to the knockout stages of the Champions League.
Managing Director, Billy Hogan, and his colleagues are trying to capitalise on Liverpool’s expanding global recognition for the club’s next kit deal. Talks are currently ongoing to renew the existing partnership with New Balance. Potentially, LFC could be about to sign a world record contract eclipsing Manchester United’s current £75 million per year Adidas deal.
In order for this to happen, New Balance will be increasing their payment by over £30 million per year. That is an enormous increase in terms for New Balance. However, they have reported two straight years of record LFC kit sales. With Klopp’s team playing an exciting brand of football and boasting talents on the field such as Mohamed Salah, Virgil van Dijk, Alisson Becker, Sadio Mane, Roberto Firmino et al, those kit sales are likely to continue to increase for the foreseeable future.
Of course, if an agreement cannot be reached with New Balance then Hogan and his commercial team will be seeking a new kit partner for the club. The usual suspects would be courted in this case – Nike, Adidas, Puma.
Adidas recently renewed their deal with Serie A giants, Juventus. The new contract will run from the 2021/22 season until the 2026/27 term with the club making $58 million per year from Adidas.
Juventus’ current Adidas deal has been running since 2015. I Bianconeri look like they will be winning their eight Serie A title in a row by the end of this campaign. Incredibly, the team has also won four straight domestic doubles (Serie A and Coppa Italia).
While Serie A might not be as lucrative as the English Premier League, Juventus’ unprecedented levels of success have kept the club on the map of football fans everywhere. The Italian champions are also regular participants in the latter stages of the Champions League so will have also benefited from the worldwide coverage which comes with that.
Back in the UK, the Premier League’s status as one of most exciting leagues in the world means clubs like Manchester United and Liverpool can command even higher fees than Juventus.
Liverpool are currently behind Manchester United, Chelsea, Arsenal and Manchester City in terms of what they make from their kit supplier. However, the club finds itself in a much stronger negotiating position now.
When they signed the last deal with New Balance in 2015, Liverpool were entering the final months of the Brendan Rodgers era. As well as that, Steven Gerrard departed that summer and besides Philippe Coutinho, Liverpool didn’t really have any big-name players left at the club.
All that has changed hugely in the three and a half years since. Liverpool can now look to strike a deal which reflects their growing global audience. Whether it will be for a record-breaking amount remains to be seen but it is guaranteed to be a huge improvement on their current New Balance contract.
Clubs can use commercial prowess and on-the-pitch success as bargaining tools when striking deals to increase revenue, whether it’s sponsorship or kit manufacturers. Look at Manchester United now. The team is having a tough time on the field but thanks to their continued commercial growth and fantastic business acumen they are still possibly the largest global football brand.
Liverpool look to have upped their commercial game in the years following FSG’s takeover in 2010. They are also enjoying some huge improvements to how they are faring on the pitch. It’s the perfect storm for kit deal renegotiations so keep your eyes peeled for what new kit supplier contract the club’s commercial department does announce in the coming months.