It’s been a good few days for the soccer operations at Adidas. On Sunday, two Adidas-wearing squads faced off in the World Cup final while their Nike-wearing brethren had been relegated to the third place game. And now, Adidas has officially taken over the uniform manufacturing for one of the world’s biggest clubs, Manchester United.
The ten-year deal starts after next season, and is worth 750 million pounds ($1.3 billion). Adidas (AG) will become one of the club’s biggest sponsors along with Chevrolet, which recently replaced Aon as Manchester’s shirt sponsor, meaning Wayne Rooney and company will hit the pitch at Old Trafford with the Chevy logo blaring across their chests next month.
While all European soccer manufacturing deals are big news, this one is potentially of special interest in the U.S., where the club’s shares trade on the Nasdaq stock exchange. According to Manchester’s most recent annual report, the Nike deal represented 10.6% of its total revenue. The new deal with Adidas is worth more than double that deal.
This isn’t the first major European club that German manufacturer Adidas has taken from its Oregon-based rival recently. This will also be Nike’s final year making uniforms for Italian club Juventus, which will go Adidas for the 2015-16 season.
Nike (NKE) is now nearly cut out of the Barclay’s Premier League, the top-flight league in England and the most watched soccer league in the world. After it loses United — and assuming it doesn’t swoop in to sign deals with any other teams — Nike will only be the manufacturer for two teams, Manchester United’s rivals (and current Premier League Champion) Manchester City and London-based Queens Park Rangers, who were just promoted to the league this year and could be in danger of falling back to the second tier after this season.
Nike also recently lost is deal with Everton, as the club home of U.S. Goalkeeping sensation Tim Howard opted to go with Umbro to make is uniforms starting this season.
Adidas, meanwhile, will add United to an impressive Premier League folder that includes London-based Chelsea and West Ham along with Sunderland and West Bromwich Albion, plus recently-demoted Fulham.
All isn’t lost for Nike in the world of big business soccer, though. The company does significantly better in some of the other top leagues around Europe. In Spain it works with five clubs in La Liga, including league winners Athletico Madrid and Barcelona, home of Lionel Messi. Adidas, though, makes the shirts for Champions League title holder Real Madrid, meaning global icon and tabloid fixture Cristiano Ronaldo will frequently be seen wearing Adidas gear.
Nike has deals with seven clubs in the German Bundesliga and four with clubs in the Italian Series A (though that will go down after the Juventus switch next summer.) It works with three clubs in Ligue 1 in France and a few other big clubs throughout Europe, including Turkey’s Galatasaray and Portugal’s Porto.
Nike also does big business in the U.S., where it took over for Reebok (RBK) two years ago to make the jerseys for the NFL. While soccer only represented 10% of Nike’s business for the last fiscal year — much less than running and basketball — it was one of the faster growing parts of the business, with wholesale revenue rising 18%.
Correction: An earlier version of this article identified Fulham as a Premier League team. Fulham was relegated after last season.
