Manchester United set to make $200 million per year from kit sponsorships with adidas deal

Despite the fact that Manchester United will miss out on the Champions League for the first time in nearly 30 years, the Red Devils are and will be able to spend relatively freely thanks to a major cash infusion. After reports emerged that Nike would give up their sponsorship of 20-time League winners (First Division and Premier League combined), adidas have confirmed that they will take over production of the club’s kits and merchandise after this season.

”We are excited to team up with Manchester United, one of the most successful and most loved football clubs globally. Our new partnership with Manchester United clearly underlines our leadership in football and will help us to further strengthen our position in key markets around the world.

“At the same time, this collaboration marks a milestone for us when it comes to merchandising potential. We expect total sales to reach 1.5 billion GBP during the duration of our partnership.”

That is what said Herbert Hainer, adidas Group CEO, said in regards to the agreement, which, all things considered, is a great deal for adidas.

The expected cost of the deal for the German brand is expected to be around £750 million over the course of ten years, which is equivalent to roughly $130 million per year that will head to Old Trafford. That, coupled with the estimated $80-90 million that Chevrolet are spending for a spot on the front of United’s shirt every season, means that the Red Devils will receive a major cash boost at the start of the 2015/16 campaign.

The new deal is far and away the richest in the history of sports and is astonishing when compared to both other football teams and other sports. According to Forbes, Puma and Arsenal’s kit deal is currently the most lucrative for a club with the Gunners receiving $51 million per year. The London club are followed by Real Madrid, who are also with adidas, receiving $41 million per year, and by the likes of Liverpool, Barcelona, and Bayern Munich, who all receive between $38 million and $39 million per annum. According to Forbes, Nike, who outfits the 32 NFL teams in the United States, pays the league an average of $18 million per team for those rights.

According to adidas, the sportswear giant will “supply product to Manchester United and outfit all of the club’s teams. In addition, adidas will have the exclusive right to distribute dual-branded merchandising products worldwide.” The new deal will last for a decade, beginning in the summer of 2015. adidas previously served as the Technical Sponsor for Manchester United from 1980 to 1992 before Umbro acquired the Red Devils’ rights. Nike served as the Technical Sponsor from 2002 and will be in that role until the conclusion of this coming season.