Liverpool To reportedly earn over £100m from new Nike deal per year

Liverpool To reportedly earn over £100m from new Nike deal per year

One of the most discussed commercial agreements in football in recent years has finally officially launched and football finance expert Mo Chatra explores just how lucrative it can be for Liverpool.

The most unusual thing about Liverpool's deal with Nike is the relatively small base figure in the contract - £30m, which is just a £2m increase from the previous New Balance deal.

It's also worth noting that the New Balance deal generated £64m for Liverpool in the 2018/19 season and is likely to exceed £70m by results of 2019/20 season.

That's due to huge kit sales numbers: 1.8m in 18/19 season and mind-blowing 2.9m in 19/20 season. One must also add to these numbers the revenue from other merchandise (training wear, casual clothing and footwear).

During the court with New Balance Nike revealed that they target 2.9m in sales, which was before NB released the numbers presented above.

Which suggests that Nike clearly underestimated Liverpool's current power on the market, as NB managed to reach these numbers even without such immense marketing and publicity capabilities as Nike clearly have.

The agreement with Nike states that Liverpool will earn 20% of all net sales both through official stores and third parties' retailors.

Let's now assume that Nike will manage to reach 3m in sales (which they most likely will) with Liverpool earning ~£12 per shirt. It results in £36m. Plus add expensive Vapor kit versions which are estimated to bring extra £3m.

This results in £69m already ( £30m base figure + £39m sales). And here come all the non-kit sales (which will be especially huge if the Reds manage to get a collaboration with Jordan).

Worst cast scenario, all this combined will easily surpass £75m mark. But it has the potential to hit £100m, if Nike kit sales increase and non-kit merchandise hits it off with the fans.

All in all, it's simply a brilliant deal from FSG's part. If only Nike's home kit design was as great. And yet, they managed to sell out in just a few hours after the release.
Follow us on Twitter and on Facebook
Loading...

Post a comment

0 Comments