Five Thoughts on the Adidas / Manchester United Deal – Ben Wells
July 15, 2014
Yesterday adidas and Manchester United announced the biggest kit deal in club football history. Here are five thoughts on the deal:
1. It’s proof that brand association can be more powerful than sporting success. That United still sell more shirts than any other club despite missing out on Champions League football and without a genuine global star in their ranks tells me that whilst heavy investment in a squad for the here-and-now can bring short-term commercial success, if you want to sustain it, you need to invest in your brand.
2. It’s bad news for everyone else. If adidas are returning to their position of a decade ago where they were focussing on a handful of mega-clubs then there will be no room for the multitude of smaller deals they have entered into more recently. There is only so much factory capacity in the world and expect those smaller deals not to be renewed. Ditto Puma/Arsenal. The smaller clubs are going to need to come up with something far more compelling than boards, boxes and 10,000 shirt sales to make the numbers add up. Long-term, the polarisation of the market is not a good thing.
3. It will be interesting to see the reaction from Stamford Bridge. Chelsea’s current deal is worth way more than it was in 2006 when adidas replaced Umbro but there is no comparing United’s footprint with Chelsea’s in Asia or the US (see thought 1) and whilst each Club attracts different audience segments (especially in Asia) the onus will be on Chelsea to differentiate rather than compete in those markets.
4. The new entrants into the apparel market are still fighting for scraps. The UK market has seen massive fragmentation in recent years but the new entrants are really going to have to invest heavily to gain the scale they need to make things work for them longer-term. The big boys are still out of reach. Is Southampton’s decision to do their own thing the start of a longer-term trend?
5. Where now for Nike in the UK? They still have Manchester City and England, but it’s interesting to see them letting Arsenal and Manchester United go in such quick time. Complete change of strategy ahead?
Ben has seventeen years’ experience on the marketing side side of sport. Having spent six years at Chelsea FC, where he was Head of Marketing and a year as Commercial Director at Reading FC, Ben has set up his own consultancy, specialising in improving business model elasticity through genuine long-term customer engagement programmes. Prior to his time at Chelsea, Ben spent nearly four years at Redmandarin, the strategic sponsorship consultancy. Follow Ben on Twitter @ben_wells1 This blog appears regularly at http://benwells1.blogspot.
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