Manchester United have a potential £1B kit deal deal with Nike on the table, but there seems to be some debate at the club whether United can do better than that.
There are two issues that are hampering the negotiations. One is that United’s current deal 13-year deal with Nike, worth £303m, gives Nike control over all aspects of producing and selling the United kit
One option then for United is sign a new 13-year deal with Nike for around £60m a year, or close to £1B over the length of the contract. Nike would then control over all aspects of producing and selling the United kit
worldwide.
The second option would be for United to do a straight record £60m-a-year football kit supply deal but market the retail and e-commerce licenses to numerous different global territories, as they do with their mobile and financial services sponsorships. They could also sell a United fashion range separately.
United have had so much success licensing their name to different companies in different markets (i.e. a European telephone provider, an Asian telephone provider) that they could probably make more money in the png run marketing the retail and e-commerce licenses themselves. But that is a massive undertaking and will involve United building a big infrastructure to handle it.
the bottom line for the club is that United’s commercial arm continues to print money. With the GM kit deal and this Nike deal, United will add about £70m a year to their revenues. Add in the new TV deal, and United have increased revenues by over £100m from these three deals.
With Uefa’s Financial Fair Play, the teams that can grown commercial revenues the most will win, and United are setting themselves to dominate Europe along with Real Madrid, Barcelona, Bayern Munich and maybe PSG for the next decade.
The gap between United and the rest of its Premier League title contenders continues to widen, setting up a situation where United’s wage bill in the future could be as much as £50m a year higher than any other team in the Premier League, setting the stage for United’s continued domination in the Premier League for years to come.
