According to reports, Real Madrid has extended its contract with Adidas supplier. A very favourable financial result for the team
The departures of Cristiano Ronaldo and Zinedine Zidane who lead to prior success and the very disappointing results on the pitch from the beginning of the season seem to affect the power of the Real Madrid brand. Proof of this is: the merengues club would be on track to formalise the European football’s most lucrative OEM contract!
Indeed, according to the information discussed today by Marca, Adidas has made a proposal to the tune of 1.1 billion€ to extend 10-year collaboration with Real Madrid. According to Bleacher Report, simply it means, 110 million euros per season, more than twice the €52 million paid annually under their current terms. That does not include bonuses and other royalties paid on the sale of derivatives. By activating different bonuses, the contract manufacturer with the brand with the three stripes could then reach the bar of € 150M per season! Also, we should not forget that they are in talks to invest in esports.
IS THE MOST EXPENSIVE EUROPEAN FOOTBALL JERSEY?
According to the information, the new contract negotiated with Adidas would come as a force from the season 2020-21. The new financial conditions allow Real Madrid to make a leap forward in terms of sponsorship revenues. So far, the Casa Blanca collects an amount of 50 million euros per season from its technical partner.
While many rumours have circulated about the renegotiation of the contract with Adidas OEM – some German media had even mentioned a secret extension between the two actors until 2024 – the brand with the three bands would give in to the financial requirements expressed by the Madrid direction. As some competitors – including Nike and Under Armour – have studied the case in recent months.
Having already renewed his Jersey with Emirates sponsorship deal last season against an amount of 70 million euros per season. Real Madrid should be viewed from the season 2020-21 a sum at height of 180 M€ – off bonus – on the part of its two main shirt sponsors. Amounts which will allow Real Madrid to continue its growth of commercial income. Commercial revenue which should cross the 300 million euros per season even before the entry into force of the new contract with Adidas.
WILL THEY RETAIN LONG THIS RECORD?
If the amounts are correct, Real Madrid will be the most expensive supplier of European football contract. A record that has long been held by Manchester United, perceiving an amount at height of 75 M pounds by season of the part… of Adidas!
Having recently extended its commercial contract with Nike, the FC Barcelona management long suggested an agreement at height of 150 M€. A sum which nevertheless includes various merchandising activities. Section sponsorship of the contract manufacturer with the firm to the comma would in fact around 85 M€ per season.
Concluding and although that there is a long-term commitment that Real Madrid is prepared to sign with its technical partner, it could result in a change of leadership in the medium term. In the meantime, Manchester United will renegotiate its supplier contract which will expire at the end of the season 2024-25. And given the commercial performance of the Red Devils, it would hardly be surprising that the Manchester club will get a new reevaluated contract.