Manchester United will rake in £750m from the new adidas deal...
so here, Sportmail looks at what went on behind the scenes as their 13-year relationship with Nike ended
- Manchester United ended 13 years with Nike to agree contract with adidas
- The 10-year deal with the German sportswear giant is worth £750million
- Ed Woodward impressed with his negotiating skills to land the deal
- United will receive 100 per cent of the profit to cover manufacturing costs
On August 1, no doubt to much fanfare, adidas will release Manchester United’s new kit.
The right to do so has cost the German sportswear giant a staggering £750million over 10 years.
For months it has been the talk of social media. Dozens of mock-ups have been released with fans across the globe whipped into a frenzy over the type of shirts Wayne Rooney and Co will wear this season.
Here, Sportsmail takes a close look at the belief-defying details of the world-record deal, reveals how bosses at Nike took less than an hour reject to United’s proposals and explains why industry insiders believe this could be executive vice chairman Ed Woodward’s finest moment of his time at Old Trafford.
Manchester United are still wearing their kit from last season during the USA tour before changing in August
Manchester United's new adidas shirt is released on August 1 but is this leaked kit the real one?
Executive vice chairman Ed Woodward played hardball and was the man who secured the adidas deal
Pre-season will be the last time fans will have the opportunity to see the Nike logo sewed onto United kits
This weekend, thousands of seats bearing the famous Nike logo will be ripped out of Old Trafford.
They will be taken elsewhere and painstakingly repainted to ensure that come the start of the season it is the stripes of adidas rather than the swoosh which takes pride of place at the Theatre of Dreams.
Over at the club’s Megastore, behind the East Stand, the shutters will come down following a 60-per-cent-off sale on everything United.
They will remain there for a week – no doubt delighting those who hawk their unofficial wares on the forecourts surrounding the famous old stadium.
Inside, a transformation will take place. Former Nike staff, including the club’s mascot, Fred the Red, will become United employees and any trace of the US firm will be removed ahead of the grand reopening.
United have been partnered with Nike for 13 years but this is coming to an end in August
Adidas, still smarting from losing the lucrative NBA merchandising rights to their old rivals, will no doubt view this one as a win.
But it may come as a surprise to hear that not many at the sprawling Nike campus in Portland, Oregon, will be crying into their Budweisers over saying farewell.
Because Sportsmail can reveal that when Ed Woodward and group managing director Richard Arnold issued a list of what they would need to see to extend their existing kit deal, senior Nike officials took less than an hour to dismiss it out of hand.
Woodward is known for being a tough negotiator and has been praised for his work behind the scenes
One of the biggest stumbling blocks was United’s insistence that rights for non first-team and training kit merchandise would be returning to the club.
Unlike the 50/50 split currently in operation (after a set figure has been reached), they wanted to make sure that if a United fan in Hong Kong bought a United clock and bed covers, that money would be going into the club’s piggy bank.
That insistence, coupled with a world record £750m (more than twice as much as the nearest European rival) asking price, meant for Nike it was a no-brainer. First came disbelief then rejection. As one door closed, another was opened for the Germans.
All of this, of course, may not concern fans.
The Nike swoosh will be removed from the Old Trafford stands as their new sponsors take over
Adidas’s victory has been greeted euphorically by many of the United faithful. They remember the iconic kits of the 80s and will be delighted to hear that the manufacturers will be releasing a number of retro items through their originals range.
But an industry insider, with knowledge of the deal, warned that they may soon be singing from a different hymn sheet.
‘Nike believed it would be impossible to make a profit under the terms United had presented,’ they explained.
The club megastore will be having a 60-per-cent-off sale for fans as they look to flog their old gear
‘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 claw back some of the money they have already spent.
‘Everyone knows Ed (Woodward) is a fierce negotiator and this could be his finest hour.’
Whether prices for United gear will rocket remains to be seen.
One thing that is certain, is that the deal represents a staggering piece of business for the club.
Everything will change inside as well as adidas begin to add their own style to the Theatre of Dreams
Last year, United made £37.5m from merchandise.
In the first year of the new deal they will rake in £75m from adidas.
Then comes the money from the other licensed products – the coffee mug and pyjama cash.
Yes, United will now have to absorb manufacturing costs, but the 100 per cent profit will boost the coffers substantially.
In the last quarterly statement to the New York Stock Exchange, Woodward said as much.
‘On the commercial side we are excited by the numerous opportunities for further growth, including the first year of our 10-year partnership with adidas,’ he explained.
The agreement is being used in the prospectus aimed at attracting new stock market investors.
The global American sports brand has been a big part of United's recent history
It is difficult to put a figure on how much revenue the new terms will generate but consider this – more than five million Manchester United branded items were sold last year and of those just two million were jerseys.
Add the increased merchandising revenues to the new TV deal and to the expected £50m boost from Champions League football (should they win the qualifying play-off) and it is little wonder why there is a buoyancy among senior figures at the club.
It is also little wonder why many believe very few players in world football are now out of United’s reach.
Watch this space.
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