Chelsea announce long-term commercial deal worth £900m with Nike

Chelsea have announced a new long term ‘Technical Partnership’ with Nike. The deal, believed to be worth a humongous £900m in total, makes it the largest ever commercial deal for the club as well as for any team from England, eclipsing Manchester United’s £750m deal with Adidas.

As per the agreement, Nike, the world’s leading sports apparel and footwear company, will become Chelsea’s official kit supplier from the beginning of the 2017/18 season for the first team, youth academy and the ladies team as well as for the club’s full clothing range for supporters around the world. Reportedly, the term for the contract is 15 years, with the London based club receiving £60m a season until the contract ends.

.@ChelseaFC today announces a new technical partnership with Nike… https://t.co/VPpce15AkX pic.twitter.com/kir8ThoZRT

— Chelsea FC (@ChelseaFC) October 13, 2016

The new deal is a huge upgrade in monetary terms for the club over their previous kit sponsorship deal with Adidas, which was worth £30m a season. Chelsea had to pay £40m to Adidas for premature termination of the agreement but given the magnitude of the new deal, the penalty paid by the club seems justified.

The reason behind the early termination is said to be due to Adidas’s deal with Manchester United (£75m per season) being more than twice the value to that of Chelsea’s deal and the company’s reluctance to renegotiate with the club. The rumors of a Chelsea and Nike association first surfaced back in May, 2016.

On the announcement of the record deal, Chelsea director Marina Granovskaia said, “This is an incredibly exciting and important deal for the club. Like Chelsea, Nike is known around the world for its excellence and innovation and we look forward to working together in what is sure to be a successful partnership. We believe Nike will be able to support our growth into new markets as well as helping us maintain our place among the world’s elite football clubs.”

President of the Nike Brand, Trevor Edwards added, “Chelsea is a world-class club with a rich tradition and passionate fans across the globe. The partnership with Chelsea reinforces our leadership position in football. We are excited to help grow the club’s global reach, serving players and supporters with Nike innovation and design.”

In terms of value per season, Chelsea’s kit deal is the second highest in England, behind Manchester United but far ahead of other Premier League rivals like Arsenal (Puma, £30m a season), Liverpool (New Balance, £25m a season), Manchester City (Nike, £12m a season) and Spurs (Under Armor, £10m a season).

However, the Premier League has still quite a lot of catching up to do when compared to the likes of Barcelona (Nike, £120m a season) and Real Madrid (Adidas, £106m a season).