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Liverpool set to cut ties with their most famous stakeholder as part of £1bn Adidas deal
News that Liverpool are set to reignite their iconic partnership with Adidas has been well received among fans, but it will spell the end of one superstar’s links to Anfield – in formal terms at least
For the last five seasons, including 2024-25, Liverpool have had their kit supplied by US sportswear giants Nike, who also fit out Tottenham, Chelsea and Brighton.
That relationship got off to a controversial start, with former supplier New Balance suing Liverpool for breach of contract for not honouring a clause entitling them to automatically match any alternative offer.
However, Liverpool were ultimately victorious in that case, successfully arguing that while New Balance did mirror Nike’s £30m-a-year baseline fee, they were not able to match their marketing and distribution.
Incidentally, the £30m-a-year figure from Nike raised eyebrows when it was first reported in 2019, with that value ostensibly being far more modest than some of Liverpool’s peers’ equivalent deals.
But the structure of the deal sacrificed a lower upfront fee for a greater percentage of the profit on units sold, which was expected to take the true value of the deal to around £75m per year.
The new Adidas partnership is believed to have a more traditional structure and will see Liverpool become one of it not the most well paid Premier League clubs from their shirt deal.
It won’t be officially announced until at least early 2025, but the Adidas arrangement will also see Liverpool move away from one particular figure who has amplified the club’s appeal in overseas markets.
Celebrity investor to loosen ties at Anfield
The celebrity endorsement racket has picked up pace within football in recent years, with Ryan Reynolds at Wrexham and Tom Brady at Birmingham City two perhaps the most prominent examples.
But Liverpool were ahead of the curve, bringing in a true superstar over a decade ago.
A year after FSG bought Liverpool for £300m in 2010, the Boston-based investment group brought in NBA superstar LeBron James and his business partner Maverick Carter in as minority shareholders.
James has since converted his stake in Liverpool into equity in FSG. He also has a close strategic relationship with RedBird Capital, an investment firm who in turn own an 11 per cent stake in FSG.
But his involvement with Liverpool did not stop when he ceased to be a direct shareholder.
As a Nike-sponsored athlete, he collaborated with Liverpool and the £40bn-revenue company on a lucrative line of lifestyle and streetwear merchandise.
This echoes the strategy that Paris Saint-Germain have pursued with Nike’s Air Jordan, the brand inspired by fellow NBA legend Michael Jordan.
Incidentally, Nike have in recent days signed a blockbuster renewal with the NBA that will see them continue as the basketball league’s official technical partner until at least 2037.
But Liverpool will no longer be able to capitalise on this link from a marketing perspective, with Nike – and, by extension, LeBron – no longer directly associated with the club.
And while the downside will be more than offset by the value of the new Adidas del, losing the third-most marketable athlete in the world, according to SportsPro, would be a blow for any club.
The true value of Liverpool’s new Adidas deal: £1bn incoming
Nike made headlines earlier this year when they wrestled the rights to produce the Germany’s from Adidas, who have been the national team’s supplier since the 1950s.
Adidas have responded in kind, taking Liverpool – who sell more shirts than any other Premier League club, according to UEFA data – from Nike.
Why does it matter? Because, with the significant exception of interest-free loans for infrastructure projects like the redevelopment of Anfield, John Henry and his peers at FSG HQ do not put any money into Liverpool.
With matchday and broadcast income broadly static in the short term, that means commercial income is defines the budget that Arne Slot and Richard Hughes have for recruitment and retention.
The Adidas deal appears to be a major boon in this respect, especially as experts agree that the true value of the partnership goes well beyond the £60m per year quoted in headlines.
Over 10 years, the alliance will be worth almost £1bn to Liverpool, according to Mo Chatra, a CFO and regular commentator on Liverpool finance.
In an extended analysis, Chatra wrote: “The club always publicly understates its kit deal sponsorship revenue (when LFC would claim the New Balance deal was earning circa £30m a year, the LFC vs. NB 2019 court case revealed it generated £59m in 18/19).
“In 18/19, commercial revenue for LFC was £188m, so the New Balance sponsorship money accounted for 31% of that.
“Liverpool broadly has a very similar number of official partners now than it did six seasons ago. Commercial revenue should be breaking the £300m mark either this season or next- and the kit deal will continue to be the single biggest contributor to that.
“It’s worth noting that the Nike deal rakes in somewhere between £80m-£90m p.a. for the club- far above the £30m base figure that’s regularly reported.
“A UEFA report disclosed that the club raked in £113m from kit and merchandise sales in 2022/23 (the highest of any Premier League club), with the Nike deal being by far the main contributor to that figure.
“Nike gazumped adidas for the German national team deal last year (adidas had that deal for decades), so in retaliation, adidas did the same to Nike for the LFC deal.
“The offer must have been exceptional because Nike had the option of matching a deal from any rival, but chose not to (even though the Liverpool partnership has been very lucrative for Nike).
“For its own reasons, the club likes to understate the real value of kit deals but have no doubts- it will be the most lucrative of any Premier League club.”