How Liverpool are getting more out of Nike’s sponsorship deal despite £ 15m cut

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Heading into the 2020/21 campaign, Liverpool Signed in a deal with sportswear giants Nike to sponsor their kits, replacing previous sponsors New Balance.

The Premier League champions were desperate to seal the partnership with Nike, even after being taken to court by New Balance. However, New Balance was offering the club £ 45 million per year in its deal, while Nike was offering only a £ 30 million annual fee.

New Balance were Liverpool’s previous partners

It seems strange, right? Why would any club fight tooth and nail to secure a deal that offers 15 million pounds less a year? Well, there is more to it than that.

First, Nike has also offered the Reds 20% of all proceeds from licensed merchandise sales. This means that the sportswear company would have to sell £ 75 million worth of merchandise to make up for the £ 15 million reduction.

Last season, the Daily mail reported that Liverpool sold 1.7 million replica jerseys. If we assume that each jersey costs on average around £ 50, that adds up to £ 85 million, which already makes up for the gap, and that’s just on the replica jerseys.

But the benefits for the Merseyside club don’t end there. The agreement with Nike also offers incredible growth potential as a brand.

New Balance are not exactly unheard of. However, when it comes to height, they don’t compare to Nike. For example, New Balance has 6.2 million followers on Instagram, while Nike has 128 million. On Twitter, Nike has 8.3 million followers, while New Balance has 257,700. Simply put, Nike’s are much, much bigger.

In addition, Nike has partnerships that allow Liverpool to access a new market that it could not before. Nike’s client list includes basketball icon LeBron James, tennis superstar Serena Williams, and rapper Drake. This will allow Liverpool to attract those who have no interest in football.

LeBron James is a minority shareholder in Liverpool

Paris Saint-Germain recently did something similar, teaming up with basketball hero Michael Jordan and his Air Jordan brand, with the star’s iconic ‘jumpman’ logo featured on the club’s third kit.

Liverpool’s aim is to catch up with rivals Manchester United, whose deal with Adidas is worth £ 75 million a year and is one of the biggest football club sponsorships. The partnership with New Balance was not enough to bring them to this level, while this deal with Nike should see them compete with the Red Devils as a global brand.

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