Liverpool have won their high-profile legal battle with kit supplier New Balance, which has now opened that pathway for a new multi-million-pound deal with Nike from the 2020-21 season.
Liverpool were being sued in the High Court by New Balance after being accused of refusing to honour their “matching clause” of their current £40m-a-year deal, which expires in May 2020. The issue that was largely being disputed was whether it was deemed that New Balance can match the distribution guarantees provided by Nike.
Liverpool, who earlier in the year also held talks with other giants such as adidas and Puma say they sought a contractual commitment to distribution as a result of repeated failings from New Balance over the past seven years.
Nike during the re-tendering process had vowed to sell the club’s kit in at least 6,000 stores worldwide of which 500 are Nike owned or controlled. New Balance insisted that they could also offer that figure but from Liverpool’s side, they argued that “their attempt to match was not a genuine one”.
During the duration of the Liverpool kit contract, New Balance had never managed to distribute Liverpool kit into more than 3,000 stores globally. New Balance themselves have around 600 shops of their own with a further 3,500 franchise stores but many of those only sell shoes.
But today, the judge dismissed New Balance’s case, meaning that Nike will officially become Liverpool’s kit sponsor from the 2020-21 season. A club statesman for Liverpool said, “The club is pleased with the judge’s decision to rule in favour of the club following the legal dispute with our current kit supplier, New Balance. We will continue with New Balance for the current season, in combination with preparing next season’s Liverpool kits with our new supplier.”
The landmark new deal will see Liverpool agree a five-year deal with Nike – Who had already committed close to £6 million on kit design and the opening of a new factory for kit production. The club will reportedly receive support from a number of high-profile ‘Influencers’ that are part of the Nike stable including Drake, Serena Williams and Liverpool Shareholder LeBron James.
According to The Athletic, there is a heavily performance related structure in place. The Athletic revealed that Nike will pay Liverpool a flat fee of £30 million per season as well as offering royalties of 20 per cent (reduced to 5 per cent for footwear) on all net sales of merchandise. Nike by all accounts have also pledged to give the club £2 million worth of licensed products per season plus a 19 per cent discount on standard UK wholesale prices for additional products.
There is also a £4 million bonus for winning the Champions League, £2 million for being Champions League runners-up and £2 million for clinching the Premier League title.
It’s the first time ever that Nike and Liverpool have worked together on kit manufacturing, with the brand keen to re-establish themselves at the top table in the Premier League after PUMA took over Manchester City’s kit deal from the start of the 2019-20 season.