Some more observations and thoughts on the ongoing LFC/Nike vs. New Balance court case...
Information revealed yesterday and today brought another twist to the case involving LFC's love triangle with New Balance and Nike. Most notable is the fact for the 18/19 season/financial year, LFC made £64m from the New Balance partnership.
It had been revealed that the current season's shirts are on course to sell 2.9m units which was revealed to be a 59% increase in sales on the 18/19 kits. This means that last season's shirts sold just over 1.8m units.
The Merseyside-based media have previously reported that the New Balance deal brought in £45m for the club in 17/18 and it was also widely reported that when the new NB deal was signed in 2015, it was worth £28m. This clearly indicates that LFC gets a percentage of sales.
This would seem to therefore make clear why in 17/18 the club made £45m and £64m for 18/19 (though some of that latter amount likely includes a bonus for winning the Champions League).
Given shirt sales are on track to increase by 59% between last season and this season, it stands to reason, therefore, that the NB deal should generate revenue of well north of £70m this season and perhaps very close or possibly in excess of the £79m Man United make from adidas.
This does then suggest that the significant increases in revenue the club believe it can make through a new Nike deal won't be as big as had been implied through stories it has fed local journalists since January.
In fact, though details that have emerged suggest the two deals are structured rather differently, the end result seems to be broadly similar levels of revenue for LFC; but I suspect LFC believe that Nike offers significantly greater growth potential than NB does.
On that point, it's interesting that NB are on course to sell 2.9m kits this season through 4,000 'doors' (i.e. outlets, whether physical or online) whereas for next season, Nike are projecting to sell the same number through 8,000 outlets; I think that's a conservative forecast.
That matter aside, the last two days in court have shown the LFC's handling of the kit deal negotiations have been poor and certain aspects of it could've been handled far better by Billy Hogan.
Nonetheless, this will come down to whether NB have been able to match Nike's offer in good faith, and whether NB were provided with a reasonable opportunity to match the offer. This could go either way, but I suspect whatever the outcome, LFC will partner with Nike in the end.
