This article titled “Liverpool expect to earn £300m from new kit deal with Warrior Sports” was written by Andy Hunter, for The Guardian on Thursday 19th January 2012 22.30 UTC
Liverpool say they expect to earn a staggering £300m through their new six-year deal with the US sportswear company Warrior Sports, and have denied accusations that underachievement on the pitch led to the collapse of their current kit deal with Adidas.
Warrior, owned by New Balance, will become the club’s kit supplier from June having agreed a £25m-a-year deal to enter the football industry for the first time. The £25m per year is a guaranteed figure for Liverpool, not performance-related, and eclipses the £23.5m-a-year deal that Manchester United have with Nike but are currently renegotiating.
With Warrior, Liverpool will control all non-branded merchandising – products outside the usual kit range – and are free to open club stores wherever they choose. That is not the case under Adidas, who control Liverpool’s kit supply and the sale of non-branded merchandise, and the club believe they can double the £25m a year from Warrior when the current restrictions are lifted this summer.
Liverpool’s managing director, Ian Ayre, explained: “Our business is split in two. We have what you call kit, the branded products, the stuff the players wear, and that’s the part of the business that the deal with Warrior covers. In our existing deal, there have been some restrictions on that in terms of the other unbranded products we sell, general retail. That sat within our deal with Adidas in certain lines and in certain markets.
“In our new deal, we have complete control of that. We will still work with Warrior, but we will have a much wider opportunity. That area of business currently represents 50% of everything we generate. The new deal represents half of what we currently generate, so we still have another opportunity to develop similar kind of revenues and that’s what encouraged us.”
Herbert Hainer, chief executive of Adidas, claimed the German company withdrew from negotiations to extend its six-year contract with Liverpool as: “We thought that what Liverpool were asking and what they were delivering was not in the right balance.” Liverpool have, however, secured a £25m-a-year deal despite not qualifying for the Champions League for the past two years and Ayre insists the club’s global appeal ensured Adidas’s requirements were met.
“I’m happy that we delivered absolute value for a partner like Adidas and we will continue to deliver that value for Warrior,” Ayre said. “We shared all the numbers with everybody we spoke to and I don’t think it would surprise anyone to know that Liverpool are one of the biggest merchandising businesses in football and we wouldn’t have had so many people interested if we didn’t have a great business. We ran a very exciting process over 12 months. We worked very hard to speak to every major manufacturer in the sportswear category and we had winners and losers. Some people are very disappointed and some people are very happy.”
Rather than taking a risk with a company unknown in football – Michigan-based Warrior were synonymous with lacrosse and hockey before last year becoming supplier to the Boston Red Sox, the baseball club that shares owners with Liverpool – Ayre believes the club will benefit as the company’s main priority. That, it is suspected at Liverpool, has not always been the case with Adidas. Liverpool’s MD added: “What really encouraged us is that this is their first foray into football and so we are their only customer and they will be very focused on Liverpool Football Club and promoting this opportunity around the world.”
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