Real Madrid and Adidas 'in talks over lucrative extension'
Real Madrid, the Spanish soccer giants, have opened talks with incumbent partner Adidas, the major German sportswear brand, over a lucrative new kit deal set to be worth over €100 million ($113 million) per year for the first time in the club’s history, it has been reported.
The two parties are in discussions over a new contract that will come into effect for the 2020-21 season, according to Spanish sports newspaper AS.
Adidas has been the club’s kit supplier since 1998, and the present agreement is understood to be worth a maximum of €52 million per year, including a fixed fee of €42 million and a variable of up to €10 million.
Last November, Marca reported that Real Madrid were in line to rake in upwards of €1.1 billion from a renewed kit supply deal with Adidas.
The record contract with the German sportswear powerhouse is expected to be worth a basic €110 million per annum over 10 years. However, once a variable element of the agreement relating to merchandise sales is taken into account, Real are said to be set to earn €150 million per year from the tie-up.
The club is hoping to negotiate a figure similar to rivals Barcelona, which signed an extended agreement with Nike, valued at €155 million per year, which came into effect this season and is the most lucrative in world soccer.
The renewal would trump England’s Manchester United’s huge contract with Adidas, which came into effect in 2015-16, and is worth around £75 million ($98 million) per annum over 10 years.
German Bundesliga giants Bayern signed a 10-year renewal with Adidas worth €900 million which came into effect for the 2015-16 season. That deal had five years to run but the German brand chose to extend with the Bundesliga champions for a further decade to 2030.
Juventus, the leaders of Italian soccer’s top-tier Serie A, extended their kit supply deal with Adidas in December, in an agreement reported to be worth $58 million a season for eight years, beginning next season.
English Premier League champions Manchester City recently signed a huge kit deal with Puma worth £650 million over 10 years, while reports emerged last week that rivals Liverpool are in advanced talks with Nike over a new long-term kit deal that would set a new league record.
Reports of Real Madrid’s talks with Adidas over a renewed deal have surfaced on more than one occasion in the past year but the brand has refused to reveal any details with David Torres, the marketing director of Adidas Iberia, recently claiming the negotiations were “super confidential”.
With the club’s sponsorship deal with Emirates, the Dubai-based airline, which is reported to be worth €70 million per year through to 2021-22, taken into account, the new deal with Adidas could make the Spanish soccer powerhouse the first club in the history of soccer to generate a revenue of €1 billion.
Earlier this year, Real Madrid overhauled Manchester United to top the Deloitte Football Money League, the annual table of the world’s leading soccer clubs by revenue. Real generated turnover of €750.9 million ($852 million) in the 2017-18 season.