Premiere League powerhouse Manchester United struck a 10-year, £750 million endorsement deal with Adidas, per the Daily Mail. Manchester United had a previous 13-year contract with Adidas competitor Nike.
Manchester United has struck a 10-year, £750 million deal with sports apparel giant Adidas.
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Mail Online's Mike Keegan says this amount covers a 10-year period in his July 23 update. Manchester United's partnership with Adidas has been the buzz on social media for months. People have been speculating on the new appearance Wayne Rooney and Co. will be sporting this season.
Adidas CEO Herbert Hainder told BBC Sport's Bill Wilson on July 23 the new contract with Manchester United will "further strengthen our position in key markets around the world."
"We expect total sales to reach £1.5 billion during the duration of our partnership," he told Wilson.
Adidas has not specified the new look Manchester United will sport next season, but did hint it will most probably be a throwback to the club's 1980s or 1990s look, per BBC Sport.
Wilson says the last time Manchester United donned the Adidas stripes was during the 1991-92 season.
It took only less than an hour for Adidas' fiercest competitor, Nike, to reject Manchester United's proposal. The club's "insistence that rights for non-first team and training kit merchandise would be returning to the club" did not sit well with Nike, per Mail Online.
Keegan's example of a Manchester United fan buying team merchandise in Hong Kong with the profit going to the football club is an example of this.
Nike also reportedly frowned upon the hefty £750 million price tag of the new endorsement deal, a new world record, per Mail Online.
A source told Keegan about Nike's stance on the issue and Manchester United executive vice chairman Ed Woodward's negotiating tactics on Thursday:
"Nike believed it would be impossible to make a profit under the terms United had presented.
"In the past, United fans have complained about the amount of merchandise and how much it costs but given how much Adidas have paid, that will seem like the good old days once the new deal kicks in and they have to try and and claw back some of the money they have already spent.
"Everyone knows Ed is a fierce negotiator and this could be his finest hour."
Now that the Premiere League powerhouse's relationship with Nike is over, thousands of seats bearing the Swoosh logo in Old Trafford will be taken out.
The seats will be transported to an undisclosed location where they will be re-painted with the Adidas logo instead, per Mail Online.
In terms of merchandise, Manchester United is selling its old Nike apparel at 60 percent off in its main retail store for another week, per Keegan.
The Mail Online update says every remnant of Nike from Manchester United's operations -- from its employees to its mascot, Fred the Red -- will be removed.
Keegan then notes the huge disparity in merchandise profit Manchester United will earn next season.
The club earned £37.5 million last season. That amount will double to $75 million in 2015, per Mail Online.
Wilson says Nike previously paid Manchester United £23.5 million yearly. The new average annual profit of £75 million is equal to $128 million.
Real Madrid's profit of £31 million per annum from Adidas used to be the biggest merchandise deal in football, per BBC Sport.
In spite of the fact Manchester United shouldering the manufacturing costs, the 100 percent profit should easily be able to offset those, says Keegan.
Keegan also foresees more profit for Manchester United when he cites consumers purchasing five million of its branded items in 2014. Only two million of those were jerseys. Other factors that come into play are merchandising revenues brought about by the new television deal and an additional £50 million from Champions League football.
Adidas' other big-name football clients include Bayern Munich, Chelsea, AC Milan and Flamengo. Jueventus will join Manchester United as the company's newest client for the 2015-16 season, per BBC Sport.
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