New Kit Deal - Under Armour?

I happened to be at Sports Direct's HQ at Shirebrook on business the other week and had a number of conversations about kit deals and sponsorships etc.

It was common enough knowledge amongst the people I spoke to that City are far from happy with Nike,the reasons for that were not expanded on, but I think it was far more than just the kit designs offered up.

Under Armour would like to get a deal with City and certainly have the backing and financial clout to do one, but the idea of them buying out Nike is beyond what they would likely look at doing.

I was told that UA currently have less than 1% of the UK market but aim to have 20% by 2020. Expect to see a lot more UA trainers and boots on sale in the UK with a focus on rugby too.
 
I assume City releasing leaks about Under Armour sniffing around is to increase our bargaining position with Nike.

I said a few months ago we could be in a weak negotiating position, with adidas concentrating on one team per league, Nike just signing big deals with Chelsea and Spurs, and us not shifting that many units with 3 years left on our current deal, it left us with no leverage whatsoever.

But leaking to the press that UA are sniffing around I assume is a tactic to try and draw Nike out in to renewing our contract on more favourable terms. And really Nike should see the bigger picture and have some foresight. We're at the same stage in our development as Chelsea were 5 years ago and they're currently selling 3x as many shirts as us. There's no reason we can't catch them up in the next 5 years. With Pep at the helm, a load of promising kids coming through, likely to be in the hunt for league and CL's, the women's team, New York and Melbourne all getting more and more exposure and the China deal, we'll be the football club with the fastest rate of growth in the next 5 years without any question.

When the Etihad deal was signed, people thought it was overvalued at £40m a season. It now looks considerably undervalued. Our rate of growth since that deal was signed has been incredible. If Nike had any sense they'd realise that just because we might not be selling the units to justify a £40m a season kit deal right now, we are very likely to be worth much more in 5 years time, so they should get in now before they lose us to a hungrier, younger and more ambitious competitor.
 
Ric said:
I imagine it depends on the terms of the existing contract. I don't think it's a given that you can just buy yourselves out, although I could be wrong.
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The agreement will be a 2 way Street. We do the business on the pitch and stay relevant all is good, but if we nosedive (like the reds) then Nike have the opportunity to renegotiate. If we continue our performances and exposure but the Nike tops don't sell in line with our trajectory, then it's Nike that are under performing and we will have the right to break away.
Before any deal is signed there will be agreements between the 2 parties on their performance in the agreement, under performances have consequences.
 
Across the City group the clubs are performing well, so the value of our next contract has surely risen. Somewhere along the line the owners will surely look to align kit sponsorship deals between all its teams. Our current deal with Nike ends in 2019, and more interestingly the kit deal with the MLS that means New York have to wear Adidas expires in 2018. If New York City end up wearing Nike it will presents the opportunity to bring the clubs together commercially. If it is not Adidas who is to say Under Armour won't bid for the prestige of winning that contract over Adidas and keep Nike out of the picture? In a nutshell, the MLS kit contract negotiations could impact the direction taken by our owners on the next brand we wear in the coming seasons.
 
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Well, some bright spark at the top not only negotiated that deal, but it was also signed off by another bright spark right at the top of the food chain at City.

All under the knowledge and understanding of what many of our rivals were getting for their kit deals.

No, we will never know what went on during those negotiations with Nike, or the small print details, but it's safe to say that even with our recent success and worldwide exposure, somebody dropped a bollock negotiating our current kit deal.
 
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