Court Sides With Liverpool In Lawsuit Over Kit Supply Contract

Nike will be new kit supplier beginning with the 2020/21 season.

Liverpool join Chelsea and Tottenham as top tier EPL clubs with Nike kits

MIAMI, Fla. (October 28, 2019) —

Liverpool FC have won a legal battle with Boston (MA)-based New Balance in the London Commercial Court and are now free to sign a new deal with Nike.

Pending an appeal by New Balance, it brings to an end the ongoing dispute surrounding which apparel provider would outfit the Premier League side’s kit from the 2020/21 season, which has been unclear since the start of the year.

Liverpool home shirt | Photo: Liverpool FC

Liverpool had made clear their intentions to switch to Nike once their partnership with New Balance, which dates back to the 2015/16 season, expired and had held extensive talks with the brand. The club rejected New Balance’s offer of a matching clause proposed for the existing contract over the summer.

New Balance took the European Champions to court over their alleged refusal to honour a £45m-a-year deal (€50.9, $55.9 million), which expires in May 2020. They alleged that under the terms, the footwear firm is entitled to renew its sponsorship if it matches any competitor’s offer, and that Liverpool had breached the contract by not renewing the contract.

New Balance World Headquarters in Boston, MA

Opening the firm’s case last week, Daniel Oudkerk QC said the key issue was whether New Balance had matched “the material, measurable and matchable terms of a third-party offer.”

Liverpool countered that New Balance had not matched Nike’s offer, which includes a commitment to sell licensed products in at least “6,000 stores worldwide, 500 of which shall be Nike-owned”. Guy Morpuss QC, the lawyer representing the Premier League club, set out to show New Balance’s claim it could distribute the club’s kit to 40,000 stores was “a myth”, and that the company had “grossly overstated” the number of stores to which it could distribute. Moreover, Liverpool argued that Nike could deliver far greater total revenue than New Balance could, reflected by Nike reportedly agreeing to pay the Reds a 20 percent royalty on net sales of Liverpool products.

Nike reportedly agreed to pay the club UK£30 million (US$36 million) per year, compared to the UK£45 million (US$58 million) New Balance currently pays. However, it would also promote the team through other high-profile athletes and influencers, including tennis legend Serena Williams, basketball star LeBron James and the musician Drake. Nike would also distribute the new kit through an estimated 6,000 global stores, compared to New Balance’s 3,000.

Chris Davis, New Balance vice-president of global marketing and sports marketing, and Kenny McCallum, New Balance general manager of global football, were both cross-examined extensively during Friday’s proceedings.

Davis’ testimony Testifying in court basically admitted that the company had made “errors” on the number of retail outlets initially planned.

Liverpool’s legal team argued that this was evidence New Balance was unable to match the terms offered by Nike. New Balance would have to double their number of stores, especially in the Far East, where their actual outlets were much lower than planned. Other evidence presented by the club’s barristers was the fact that a large number of New Balance stores sold only the company’s footwear and not replica kits.

Giving his ruling in London, Mr. Justice Teare of the High Court ruled in Liverpool’s favour, finding that “the New Balance offer on marketing was less favourable to Liverpool FC than the Nike offer.” A full written statement from the judge will follow but he told the court: “For the reasons given in the judgment handed down, the claim from New Balance is dismissed.”

In his ruling, Mr Justice Teare said: “Liverpool FC is not obliged to enter into a new agreement with New Balance.”

The court also heard that Liverpool spent more than £555,000 on the case, with 20% to be paid by New Balance.

Liverpool will now move ahead to finalise a five-year deal they have agreed to in principle with Nike, who have apparently already spent nearly UK£6 million (US$7.7 million) on kit design. Liverpool and Nike have worked together for the past two months. [The Reds claim Nike’s offer to them, which they apparently had accepted in principle in August, amounted to a legally binding obligation to contract with Nike.] The two sides have already agreed on designs for the replica kits and training kits for the 2020-21 campaign, while Nike have reserved factory space to manufacture 2.9 million units over the course of next season and have already invested more than $5.8 million in fabric.

While the possibility of an appeal of the court’s dismissal is possible, the relationship between New Balance and Liverpool is irretrievably damaged, and even if New Balance won on appeal, forcing Liverpool to work with them for another five years is not going to happen. The only question would be damages owed by Liverpool for breach of contract. A New Balance spokeswoman said the firm was disappointed, adding: “We believe strongly that we matched the competing offer and would have delivered many more years of record-breaking kit sales.”

Jordan Henderson and Mo Salah celebrate in Liverpool’s 2-1 victory over Tottenham at Anfield on Sat. Oct 26, 2019.

LAFC is first in MLS with sleeve sponsorship deal

Newest Member of the Golden Boot Club

MIAMI, Fla. (October 15, 2019) —

Los Angeles Football Club has added a new corporate sponsor to its lineup. The club revealed that retail giant Target will join the exclusive Golden Boot Club beginning in January 2020, serving as the Official Retailer of LAFC. The multi-year partnership includes the Target logo prominently displayed on the left sleeve of LAFC’s primary and secondary shirts.

“This is another historic day for our Club as we welcome Target to the Black & Gold family,” said LAFC President and Owner Tom Penn. “Target is an innovative leader that shares our passion for culture, community and inclusivity. We’re proud to showcase Target on our jerseys and throughout the LAFC community.” 

“With a strong presence in the Los Angeles community, we’re thrilled to team up with the Los Angeles Football Club,” said William White, Senior Vice President of Marketing, Target. “We support soccer because we know how much our guests love this sport, and we’re excited to bring the bullseye to the jerseys of the Black & Gold.”

LAFC’s elite level of partnership is the Golden Boot Club, which provides exclusive access, visibility and experiences for its members. As the newest member of LAFC’s Golden Boot Club, Target joins Banc of California, Delta Air Lines/Aeromexico, Heineken, Kaiser Permanente, Toyota and YouTube TV.

The Target sleeve patch will also be present on shirts sold in retail.

Major League Soccer (MLS) announced approval of sponsored sleeve patch sales on team uniforms in October 2018. The new initiative is a multi-year pilot program, and available only to those clubs that have already secured a primary jersey sponsor.

The terms of the arrangement were not disclosed, but my research suggests said that MLS sleeve deals could be worth anywhere between US$500,000 and US$1 million per year. Given the success that LAFC has had, and their location in the nation’s No. 2 media market, it seems likely that the Target sleeve sponsorship will earn above the estimated range.

The size of the sponsored sleeve patch will be roughly the same size as the existing MLS logo on the right jersey sleeve, roughly 2.5 by 2.5 inches.

The deal comes at the close of LAFC’s second season, which saw them winners of the MLS Supporters Shield, and an upcoming game for the MLS’s Western Conference championship.

LAFC’s Carlos Vela chases down a ball during a match on April 13.
LAFC’s Carlos Vela chases down a ball during a match on April 13. Photographer: Harry How/Getty Images

Target is already heavily invested in MLS. The Minneapolis-based company is the main shirt partner for Minnestoa United FC. It is also a league partner.

In addition to the sleeve patch, Target will place its logo on digital signs around the team’s stadium. The company also has the right to brand a field-level suite where the club entertains VIP guests and celebrities.

Being the first to announce a sleeve partner was a goal for the team, according to Penn, who compared it to the team’s 2018 YouTubeTV deal, when it became the first major U.S. franchise to award its local TV rights to a streaming provider.

“We love being first,” said Penn, who is also an LAFC owner.

Data Analytics

LAFC studied data gathered by the club in order to help sell potential partners on the new ad space, including metrics such as the exposure its jersey had received in 2019 from live broadcasts, highlight videos, social-media posts and news coverage. For example, over the first six months of this season, the MLS patch on the other sleeve received 550 million impressions.

“Every time Carlos Vela does something dramatic and the goal footage goes global, it will have a Target mark right on the sleeve,” LAFC President Tom Penn said. “It’s easy to quantify the number of impressions and the extent of the exposure that the partner gets.”

Selling sleeve patches aligns MLS with prominent soccer leagues across the world, such as La Liga Santander and the English Premier League, where teams have both a main shirt sponsor and a second logo on the sleeve.

Image result for lafc
Aug 25, 2019; Los Angeles, CA, USA; LAFC players pose for team photo prior to kickoff. Credit: Kirby Lee-USA TODAY Sports

LAFC Background

Los Angeles Football Club became the second MLS club in Los Angeles, joining the Los Angeles Galaxy, after owners paid $110 million in 2014 to establish the team. It started play in 2018 and immediately became one of MLS’s most valuable franchises, according to Forbes.

LAFC is controlled by a trio of owners — Apollo Global Management senior partner Larry Berg, Ares Management co-founder Bennett Rosenthal and Riot Games Inc. co-founder Brandon Beck. Other investors include Brooklyn Nets owner Joe Tsai, who is also co-founder of Chinese e-commerce giant Alibaba Group Holding Ltd., actor Will Ferrell, soccer star Mia Hamm, and former Los Angeles Lakers player Earving “Magic” Johnson.