Tag Archives: adidas

The Fabric of Football | The Arsenal: This is Home

“When you start supporting a football club, you don’t support it because of the trophies, or a player, or history, you support it because you found yourself somewhere there; found a place where you belong.” – Dennis Bergkamp

There are many different routes to becoming an Arsenal fan. Whether you were born into it or they were your local club. Whether it was because of Kanu or Thierry Henry. Or whether one day you were watching the 1991 FA Cup Semi Final on TV and decided to support the loser.

Regardless of how you become an Arsenal fan, what is important is that you found a place where you belong. You found a home.

As part of the new Arsenal kit launch, Adidas have produced a short film giving an in-depth look at the identity, community and values that make the club so unique.

Fabric of Football: This is Home calls on the experiences and insights of club legends, current male & female stars, hopefuls of the future, as well as fans to explore what makes The Arsenal a global club with local community at its heart.

The film – the second in the Fabric of Football series, following a similar look at the values of Real Madrid CF  – celebrates the progressive and inclusive mentality of Arsenal, with club legend Ian Wright speaking with typical candour and passion about the role of the club in his experience growing up in London.

As well as Wright, Mesut Ozil, Alex Iwobi, Mattéo Guendouzi, Vivianne Miedema, Pierre-Emerick Aubameyang, Alexandre Lacazette, Leah Williamson, Jordan Nobbs & Per Mertesacker, all reflect with pride on their own journeys with the club so far.

This is that film

SheWore

The good and bad of Arsenal’s £300m Adidas deal

Arsenal are set to announce a new kit sponsorship deal with Adidas, 24 years after swapping the German sportswear giant for Nike.

The 5 year deal is reportedly going to be worth £300,000,000, or £60,000,000 a year.

It will see Arsenal bring in £114,000,000 a year from its 3 main sponsors – Adidas, Emirates and Visit Rwanda. This represents a huge increase on the £16.8million Arsenal received in 2013 from Nike and Emirates.

Here are my thoughts:

Ivan Gazidis showing his worth?

Some will point to the huge deals as highlighting what Ivan Gazidis does. That in his time at Arsenal he has bought in record revenues to the club.

But as the aphorism go’s; “a rising tide lifts all boats”.

Whilst Arsenal have broken club records in terms of revenues, it is in an era that all clubs are doing similar. In fact, according to Swiss Ramble only Liverpool have had slower commercial revenue growth than Arsenal since 2009.

Manchester City’s figure has to come with a pinch of salt – their huge growth has come from their mega-rich owners sponsoring themselves.

Back in 2009, Arsenal’s commercial revenue was 68% of Manchester United’s. 8 years later it is just 42%.

Liverpool, Arsenal, Chelsea & Tottenham have all increased their commercial revenue by a similar percentage, whilst Manchester United have pulled away from the other 4.

So is it a success that Ivan Gazidis has kept us on par with other clubs? Or would this additional revenue have come in regardless? IE everyone’s has risen, so it is only natural that Arsenal’s would have risen.

The new mega-record-breaking shirt deal highlights this.

Is it a success to shout about a new £60million a year shirt deal when Chelsea have the same deal? And Manchester City are set to sign a £50million deal with Puma. Everyone else’s deals have risen, so it is only natural that Arsenal’s has.

Meanwhile Manchester United recently signed a £75million deal with Adidas

The fact we have let Manchester United get away from us is a complete and utter failure of our commercial department. One that has held the club back for a decade, and why I am not too bothered if Gazidis leaves.

Double Edged Sword

Shirt deals are always a double edged sword in my opinion.

On one hand, the increased revenue coming into a club is much needed. It will allow for better players to be signed, which in turn should lead to a higher chance of success.

On the other hand, Adidas will want to see a return on their investment.

These huge kit deals we are now seeing throughout European football are the reason why we now get 3 its a year, at a cost of £60.

Back when I grew up, Arsenal would bring out one kit a year.

A home kit this year, away next year. The 3rd kit was basically the previous 2 seasons away kit, got out of storage, washed and ironed.

This meant every I got the newest kit, usually for my birthday from a grandparent.

One new kit a year, it was financially viable for all involved.

Now if you want a child to have the latest kits – and lets be realistic here, you do not want your kids to go to football training or school with an old kit – you have to buy two kits a year; or even 3 if you get them the away kit.

Regardless of rising kit costs, just buying the home and away shirt each year for your child double’s the costs from when I was a child getting 1 kit a year.

Now imagine you have 3 children. That is 6 kits a year minimum you will probably fork out for.

By the time you get a name and number on the back, you are looking at £45 a shirt. Add the shorts and socks and you are looking at £95 each. That is £190 for both the home and away, or £570 both your 3 children. For clothes which in a years time will be “out of date”.

A full kit for a 6 year old child with their favourite player on the back now costs £65. £130 for both home and away.

And these costs do not even take into account buying the 3rd kit.

Every time the new kit is released, I see fathers moaning about how much it is going to cost them to ensure their son or daughter has the latest kit. And they are right. But have they then also “celebrated” when Arsenal announce a new record kit deal?

Unfortunately, you can not have it both ways.

You can not have a £60,000,000 kit deal without 3 kits a year costing nearly £100 each.

Adidas will want to continue to see revenues increase, and the only way they can do this is by producing 3 kits a season, at high prices.

Bubble Bursting?

A final thought on this.

There will become a time when the bubble bursts on kit deals. When manufacturers are no longer selling the units to cover the cost of sponsoring the clubs.

In 2016/17 Arsenal sold 1.3 million shirts. It is actually fairly a low number considering the club has 13.7million Twitter followers. It probably highlights how many shirts get sold in foreign lands that are fake. But that is another article.

So lets say in that in the first year of the Adidas deal, 1.5million units are shifted, that Adidas have invested £40 for every shirt sold.

Now of course, Adidas do not profit 100% from every shirt sold.

They have manufacturing costs and the retailer (whether the Arsenal store, Sports Direct, JD Sports or any other retailer) also make a chunk of profit.

At current prices (£55 for the current Adidas Manchester United shirt), we are probably getting very close to the point where what Adidas are paying clubs, and what profit they are making are pretty much equal.

This will cause another rise in shirt prices as Adidas look to increase what they are charging retailers, which in turn will push the charge to consumers up. But this will only work if the consumer are still happy to buy the kit at the new price.

Like with the increasing football ticket prices, eventually you reach a point where the buyer is no longer buying, and the bubble bursts.

I wonder how much more kit manufacturers will be willing to pay the clubs until it no longer becomes financially beneficial? Or how much more kit costs can rise until families just stop buying?


 

So there we have it, the good, the bad and the ugly of Arsenal’s new £300million kit sponsorship deal…

Keenos

Arsenal set for “double your money” kit deal

In 2014, Arsenal announced a new, long term partnership, with Puma. A deal worth £150m, or £30m over 5 years. It was, at the time, one of the largest deals of its kind in football.

Arsenal had been with Nike for 20 years, but in the early 2010’s, had decided to seek a new kit manufacturing partner. Adidas were in prime spot and were expected to sign a deal, until Puma swooped in late, gazumping the money Adidas had put on the table.

At the time, Cardiff City and Newcastle United were the only Premier League clubs to have their kit made by Puma, so the Arsenal deal was a massive coup for the German company.

“Arsenal represents a major commercial and marketing opportunity to reinforce Puma’s credibility as a global sports brand,” chief executive Bjoern Gulden said in a statement.

The deal Arsenal signed with Puma back in 2014 was one of the largest in world football lat the time. But as with our shirt sponsors, we are always at the beginning of the new cycle of mega-deals, and it was soon gazumped by Manchester United and Adidas:

It is clear that Arsenal are getting well below from Puma than what they could command in the current market. Half the value of Chelsea, 40% of the monster Manchester United deal. Not much more than the likes of Liverpool and Tottenham; whom we sell significantly more shirts than.

One interesting thing to note is the Chelsea deal. It is massive. Worth £900m at the time. But it is also a deal signed until 2032.

Whilst they might be getting more than they would “naturally” command now, you have to think in 5 years time, that deal could be considered poor.

Clubs usually sign 5 or 6 year deals, to enable themselves to not be caught out if there is jump. Arsenal suffered when they signed a long term deal with Emirates to help finance the stadium, and found themselves receiving a lot less than other sides in commercial revenue.

The Chelsea deal will be judged in the course of time.

Despite being fairly average, Arsenal are still amongst the runners for most shirts sold. It is this that makes Arsenal such a good proposition for manufacturers, rather trophies won.

Reports are that Puma and Manchester City have entered negotiations. With Manchester City looking to cut their £18m a year Nike deal short, and sign a £45m one with Puma.

This rumour is interesting, as it shows that Puma are concerned about not sponsoring a top Premier League team. Were the Arsenal deal to end, they would not have a major club in England wearing their shirt.

It also highlights how poor Manchester City are still seen abroad.

Despite running away with the league this year, the deal with Puma will still be a lot less than the Chelsea and Manchester United ones.

Puma base what they are willing to pay on the shirts they can sell – and not on the trophies won. Manchester United outsell every team in the Premier League (and the world) hence where there deal is the biggest.

It should also be remember that clubs do not get a “cut of global sales”. The only extra money a club makes on top of the licensing and manufacturing agreement is when they sell the shirts in the club shop or online. “Buy Direct” as Arsenal say.

When it comes to selling shirts, Arsenal or Manchester United are no different to Sports Direct or JD Sports. They make their money on the difference between what Puma (or Nike) sell the shirts to them for, and what they sell them on to us, the consumer, for.

Sorry for digressing.

Despite not winning a league title since 2004, Arsenal will still be considered by the likes of Nike and Adidas as a premium band. Someone that they want to supply, and pay big bucks to supply. Only 5 clubs in world football sell more shirts.

Barcelona have recently signed a £150m deal with Nike. Manchester United’s is at £75m a season. Chelsea £60m a season.

Adidas pay Bayern Munich £65m a season.

It is the Bayern Munich deal that is most comparable.

Arsenal sell a similar amount of shirts as the German giants, and Adidas want a London Premier League club after losing Chelsea to Nike. The deal will be done between Arsenal and Adidas.

Munich is the jewel in the crown for Adidas. A German based company, German’s biggest team. It is a match made in heaven. Despite this, they get less from their deal than Manchester United. Ultimately it comes down to business. Manchester United sell more shirts, so get more money.

Personally, I can see Arsenal signing a deal with Adidas in the region of £60m a season, doubling our current Puma deal.

I also do not think we will join Chelsea in a 15 year long deal. We should look at the Manchester United deal, expiring in 2024, and look at an expiry date of around that time.

In 2024, Manchester United might double their deal again, taking themselves to £150m. That would dwarf every other side in the Premier League.

Arsenal would not want to be sitting there in 2024 on £60m a year with 8 years to run, whilst Manchester United have a £150m a year deal. That could create a long term deficit of £720m. A lot of money.

Arsenal need to close that commercial gap between themselves and Manchester United. House deals with Emirates and a new kit manufacturer need to be just the beginning.

Keenos