Liverpool and Nike negotiations to begin with hopes of £80m left and time running out on kit deal

Over the next year, Liverpool will begin the process of engaging Nike to expand the existing partnership between the two.

Back in 2019, the Reds won a battle at the High Court in London to get out of their previous deal with New Balance after the Boston firm tried to activate a clause that would allow them to extend the partnership if they match a rival offer.

In the end, it was determined that while Nike paid a lower guaranteed annual sum of around £30m, it was the world’s biggest sportswear company’s ability to deliver at scale, and the commitment that the Reds would receive 20 per cent of the proceeds from Liverpool/Nike-branded merchandise, that proved key. Throw into the mix the influence they wielded through a star-studded client list that included the likes of rapper Drake, tennis star Serena Williams and basketball icon and Fenway Sports Group partner LeBron James, and it was a deal that opened up huge opportunities for Liverpool.

The contract is set to run until the end of the 2024/25 season, but discussions will start on how to move forward during the coming season. There is a desire on both sides to extend the partnership well into the future to make it a long-term collaboration given how valuable it has been to the club so far and how the extensions to the deal, such as the LeBron x Liverpool collection and the tie-up with Nike-owned Converse, have been received and opened up the club and Nike to new markets.

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The commercial benefits for Liverpool are now being seen. While the individual breakdown of commercial income does not specify how much the Nike deal has earned, compared to 2019/20, the last season with New Balance, Liverpool’s commercial income has increased by £30m to £247m in 2021/22, the latest financial accounts. It is expected that a truer value of the partnership will be seen when the accounts for 2022/23 are published early next year for the year ending May 2023. However, with the new collaborations with James and Converse only starting in earnest in the 2023/24 financial period, it will not be until then that the true value of it will be seen, with the potential for annual sums not exceeding £80.

There are simpatico relationships that exist between Liverpool and Nike. James is Nike’s most key client and someone who has a stake in FSG, and who will have a more prominent role in the company’s future as they look at an NBA expansion franchise in Las Vegas in the coming years, which James is earmarked to lead. Then there’s the investment FSG made, along with Nike and RedBird Capital, 11 percent stakeholders in FSG, in James’ SpringHill Entertainment Company in 2021.

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