Adidas and Real Madrid close in on €1.1bn sponsorship renewal

November 6 – Reports from Spain indicate Real Madrid are on the verge of signing a €1.1 billion sponsorship renewal with Adidas.

The new 10-year deal at €110 million a year is more than twice the current €52 million a year being paid by Adidas.

Real Madrid have won the Champions League four times in the past five seasons and while they have been less ssuccessful in La Liga, it is the Champions League exposure that is driving the value up for Adidas.

The €110 million is a minimum guarantee, but Adidas payments could prove to go as high €150 million depending on club performance and merchandise sale.

The new money comes at the right time for club president Florentino Perez’s plans for a €575 million renovation of the Santiago Bernabeu. Initially expected to be funded via stadium naming rights, the refurb will now be funded via a bank loan.

Even so, the Real Madrid deal will still only be the second highest kit deal in world football behind Nike’s £140 million-a-year agreement with Barcelona that kicked in this season.

The next highest is Manchester United’s £75 million-a-year deal with Adidas. Arsenal last month confirmed they are switching from Puma to Adidas for their kit deal from the 2019/20 season in a five-year agreement worth £300 million for the five years

For Arsenal the uplift from Puma to Adidas is worth about £160 million over the term of the deal. Puma paid an estimated £140 million for their deal with the Gunners in 2014.

But Puma aren’t out the big club kit supply game and are reportedly about to sign a £50 million a year agreement with Manchester City.

Arsenal’s deal equals that of Chelsea’s deal with Nike which is similarly pegged at £60 million a year but runs through to 2032 when Nike would have spent a massive £900 million with the club.

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