Back in 2018 it was announced that Tottenham Hotspur had signed a 15-year deal with US sportswear giant Nike for them to be the club’s kit partner for the long-term.
The figure on the deal at the time was reported to be around £30m per year, a total sum of £450m in guaranteed revenue, which six years ago wasn’t too much in the shadow of what some of their rivals were earning.
What the deal did bring was long-term guaranteed revenue at a time when the club had borrowed considerable funds to complete the Tottenham Hotspur Stadium. Having such money that can be relied up for such a long period of time, and from such a blue-chip company as Nike, was comforting to lenders, and remains so whenever the club might need to access credit.
Spurs chairman Daniel Levy, addressing the Tottenham Hotspur Supporters Trust back in 2018, pointed out that the value of deals was different for Spurs than some of their rivals as they opted to keep their merchandising rights in-house. Other clubs sold theirs and added that to the headline figure.
There was also the acknowledgement that Spurs don’t sell as many shirts as some of their rivals globally, such as Liverpool and Manchester United, and that was impactful as to how much the club could realistically generate from kit partners.
It was a sensible move that allowed Spurs to partner with the world’s biggest sports manufacturer, one that could deliver at scale and had a strong direct-to-consumer focus, something that was core for Spurs given their desire to satisfy demand for merchandise overseas, particularly the East Asian market, one that had boomed through the popularity of Heung-min Son.
The drawback from such a move, however, was that the club had to take the risk of leaving money on the table if the kit partner market continued to boom, which has been the case.
Earlier this week it was revealed that Liverpool were to make the switch from Nike to Adidas next season, a sum of around £60m mooted, although that figure does not include the incentivised nature of the deal that could drive the sum up to some £90m. That won’t be over 15 years or so, more likely five, but it hands the Reds a big financial boost, one that Nike felt they could not match.
Elsewhere, Manchester United have a £90m-per-year, decade-long deal with Adidas in place, albeit one with plenty of caveats attached related to supporting performance that could see that figure reduced. Arsenal have a deal of around £75m in place with Adidas, and Manchester City a long-term deal with Puma at around £65m per season.
The problem for Spurs is that right now, Nike are likely to have only Spurs and Chelsea on their books as part of the Premier League’s ‘big six’, and in losing Liverpool to their German competitors Adidas, they likely wouldn’t be keen to reduce their footprint in the world’s biggest domestic football league.
What that would have meant is that Nike would have been more willing to raise the stakes in terms of what was on offer to ensure that they had a significant footprint in the Premier League with top sides, particularly given the global appeal of the competition and how many shirts are sold around the world by the biggest clubs.
But there is little that Spurs can do now. There was wisdom in locking in guaranteed revenue at that level for such a long period of time, but the downside was that it didn’t allow the club to maximise the potential of the growth in the market, with their rivals having all renegotiated significant deals in the past two years.
It means that Spurs have had to leave money on the table in the short to medium term, but they have been able to sensibly plot a course for what the next 15 to 20 years looks like at the club and not be at the whim of booming markets that could also nosedive at any point. A long deal protects against that, even if it means missing out on some of the riches that may have been on offer.