Football clubs generate revenue on a yearly, monthly or weekly basis from three major constituents: match-day revenue, broadcasting revenue and commercial revenue. The match-day revenue is generated from ticket sales on a seasonal, monthly, weekly or per-game basis at the actual games and also applies to the renewal of the annual memberships of ticket buyers. Broadcasting revenue is derived from both domestic and international competitions by taking part in the competitions or reaching a certain level in the competitions. Commercial revenue comes from merchandising and sponsorship deals with various manufacturers.
Like broadcasting revenue and match-day revenue, commercial revenue is a major factor determining the yearly revenue and income of not only football clubs but also the players. Clubs generate commercial revenue from, besides merchandising, kit sponsorship deal and kit suppliers/manufacturers deal. It is to be noted that both these deals are separate and different.
Kit sponsorship deals happen when a club signs with any manufacturer or company that is willing to pay the club a certain amount to place their logo or name on the club's official and training kits in all or certain competitions. Then there is the kit suppliers/manufacturers deal, which a club strikes with sports clothing manufacturers such as Adidas, Nike, Puma, Umbro, etc, for them to supply and sell their official kits worldwide. For the world's biggest or the most successful football clubs, the right to put a sports manufacturer's logo on their kit comes with a big financial pricetag.
This article is about the current most expensive kit suppliers deals of football clubs. Besides the generation of revenue on a large scale, these deals also provide the clubs' players and other staffs a number of additional hospitality rights, advertising rights and various other benefits. Also, the shirt suppliers deal is worth a huge fee because of the never-ending marketing opportunity in every game the club plays, as well as the street-level marketing that happens when fans buy and wear their favorite team's jersey.
So, without further ado, here are the top ten most expensive kit suppliers deals in football.
10 AC Milan - Adidas - $19 million per year
Adidas and AC Milan's kit manufacturing partnership dates back to 1998. Prior to that, Lotto, Italy's famous sportswear company, had been supplying Milan's sportswear since 1993. The Rossoneri's 10-year relationship with the German sportswear giants was renewed in 2007 on a lucrative $19 million per year deal that will run through the end of the 2017-18 season. Besides the kit logo on the shirt, Adidas will also be responsible for assisting the club in merchandising and distributing Milan's non-football based products.
9 Manchester City - Nike - $19 million per year
Manchester City is one of the richest football clubs in the world, valued at $689 million. Their current kit suppliers deal is with U.S. sports manufacturer Nike; the contract was signed in 2013 and will run to the end of 2019. Prior to Nike, City's kit manufacturing deal was with Umbro since 2009, after the club signed a 10-year deal on an estimated fee of £6 ($9.89) million a year. The current contract sees Nike pay City $19 million per year.
8 Bayern Munich - Adidas - $29 million per year
Adidas have been a stakeholder in Bayern Munich since 2002, when they purchased 9.4 percent of the club for around US$111 million. The German sports manufacturer signed an eight-year kit suppliers deal with the Bundesliga giants in April 2011; the deal will run from 2012 till the end of 2020. Adidas will pay Bayern an estimated $29 million per year. With a 50-year association already under their belts, with the deal between Bayern and adidas opened a new chapter in their long-term partnership.
7 Juventus - Adidas - $30 million per year
Juventus's current kit suppliers are Nike. The first deal with the U.S. sports manufacturer was signed in 2003 and the recent deal signed in 2012 will run through the summer of 2016, with Nike is paying the Italian club $17 million per year. This deal is the 11th most expensive kit manufacturers deal in football. However, Juventus will part ways with Nike after 2016. They have already announced Adidas as their shirt suppliers from 2016 to 2022. The deal is estimated to pay Juventus $30 million per year.
6 Chelsea - Adidas - $32 million per year
Chelsea has been ranked by Forbes magazine as the seventh most valuable football club in the world, valued at $761 million. The club's kit has been manufactured by Adidas since 2006, which is contracted to supply the London side's gear from 2006 to 2018. The partnership was extended in October of 2010 in a deal worth £160 million over eight years. This deal was renewed again in June of 2013 in a deal worth £300 million over another ten years; Adidas will pay Chelsea $32 million per year until 2023.
5 Liverpool - Warrior - $40 million per year
Warrior sports, based in Michigan, is a manufacturer of ice hockey, football and lacrosse equipment and clothing. In 2012 Warrior entered the football market, by signing a $40 million per year kit manufacturing deal with English club Liverpool F.C. With the deal, running till the end of 2015, Liverpool ended their relationship with sportswear giants Adidas, stretching back to 1985. Also, their managing director Ian Ayre claimed the club had answered a snub by Adidas, hence proving the club's standing as one of the 'biggest football brands in the world' by signing the deal.
4 Manchester United - Nike - $41 million per year
Prior to Nike, Manchester United's kit suppliers were Umbro. The relationship between the two lasted for ten years until 2002; it was Umbro's second spell with the Premier League club, cited as one of the 'biggest footballing brands around the globe.' Nike's 2002 record-breaking £302.9 million deal that is estimated to pay United $41 million per year will last until 2015. That deal saw the company sell 3.8 million replica shirts in the first 22 months. In January of 2014, it was widely rumored that Nike had entered negotiations with the club again over a "billion dollar" (!) kit manufacturing deal, extending their current deal beyond 2015.
3 Barcelona - Nike - $43 million per year
Barcelona is arguably the most successful football club in Europe over the last seven/eight years. With the success, the club has established itself as a world-recognized brand more than ever. Barcelona and Nike have had a long-term kit manufacturing relationship since 1998. In 2008, when the club had no corporate sponsorship, a new deal was signed with the American sports manufacturer. The deal is worth $43 million per year, and will run through the end of 2018, making it the third largest kit suppliers deal in the football world.
2 Arsenal - Puma - $45 million per year
Arsenal's shirts have been made by sports manufacturers including Bukta, Umbro, Adidas, Nike and Puma. When Nike took over from Adidas as the club's kit manufacturer in 1994, Arsenal's away colors were changed to two-tone blue shirts and shorts. The Londoners' current kit suppliers are Puma; the deal was signed in January 2014. Puma will pay Arsenal $45 million per year till the end of 2019. Addition to that, the deal will increase the club's revenue by a full £22 million and will provide a huge lift in the spending power that will be available to Arsene Wenger. Arsenal will wear the Puma logo-embedded jersey from next season.
1 Real Madrid - Adidas - $49 million per year
Adidas and Real Madrid's kit manufacturing partnership, extended until the end of the 2019-2020 season, is the highest-paid kit providers deal in football history. Revealing the news in their annual financial report issued to club members, the club announced that the renewal would be worth around $49 million per year. With the deal, the club continues to record increased revenue from its footballing activities, excluding transfer revenues. The partnership between the two dates back to 1998, and it is the German sports manufacturer's second partnership spell with Real Madrid.