Kit Supply Deals – a snapshot

The global health pandemic has hit the apparel industry hard.

Sport analysts at GlobalData forecast worldwide apparel sector losses of $279 billion, a fall of 15.2 per cent year-on-year. But there are signs of recovery, as demonstrated by Nike, which saw sales rebound from the coronavirus slide in its latest financial quarter.

In this report, GlobalData analysed 255 soccer kit supplier deals across the top leagues in Europe’s top 15 soccer nations as decided by the Uefa Association Club Coefficient in a bid to provide a comprehensive landscape of the soccer kit supplier landscape on the continent today.

European soccer remains one of the biggest commercial markets in global sport, with sportswear brands paying a premium to kit out the biggest teams.

• In the top-tiers of Europe’s leading 15 soccer nations, kit supply agreements for the 2020-21 season will generate an estimated $1.58 billion in revenue.
• The 20 most lucrative European club kit supply agreements for the 2020-21 season amount to an estimated $1.19 billion in value, some 75 per cent of the total.
• Of the 15 leagues analysed, almost 90 per cent of kit supply value is concentrated in Europe’s top five leagues: England, Spain, Germany, Italy, and France.
• Kit supply agreements with top-tier European clubs act as one of the best ways to raise both awareness and credibility for sportswear brands. As such competition between sportswear brands for kit supply agreements is strong, with 37 brands supplying 255 teams within the analysis.

Nike and Adidas command the European soccer kit supply market. Puma consolidated as third biggest player.

• Nike and Adidas make up 75 per cent of total estimated brand spend, up to 87 per cent when Puma is included.
• The market is less concentrated in terms of deal count, with Nike and Adidas supplying 38 per cent of the 255 teams analysed.
• Nike is the most prevalent brand, holding 57 of the 255 contracts analysed, and biggest spender, an estimated $618.8 million (39.25 per cent).

Nike, Adidas and Puma’s focus are on supplier deals with Europe’s elite, leaving market wide open for medium to low value deals.

• Analysis of agreements estimated to be worth over $5 million annually (tier one agreements), showed the perennial top-three to make up for 94.6 per cent of total brand spend on the 44 agreements included in that tier.
• Market share for the top-three for agreements in tier two (between $1 million and $5 million) and in tier-three (below $1 million) drops significantly.

European soccer remains one of the biggest commercial markets in global sport, with sportswear brands paying a premium to kit out the biggest teams.

• In the top-tiers of Europe’s leading 15 soccer nations, kit supply agreements for the 2020-21 season will generate an estimated $1.58 billion in revenue.
• The 20 most lucrative European club kit supply agreements for the 2020-21 season amount to an estimated $1.19 billion in value, some 75 per cent of the total.
• Of the 15 leagues analysed, almost 90 per cent of kit supply value is concentrated in Europe’s top five leagues: England, Spain, Germany, Italy, and France.
• Kit supply agreements with top-tier European clubs act as one of the best ways to raise both awareness and credibility for sportswear brands. As such competition between sportswear brands for kit supply agreements is strong, with 37 brands supplying 255 teams within the analysis.

Nike and Adidas command the European soccer kit supply market. Puma consolidated as third biggest player.

• Nike and Adidas make up 75 per cent of total estimated brand spend, up to 87 per cent when Puma is included.
• The market is less concentrated in terms of deal count, with Nike and Adidas supplying 38 per cent of the 255 teams analysed.
• Nike is the most prevalent brand, holding 57 of the 255 contracts analysed, and biggest spender, an estimated $618.8 million (39.25 per cent).

Nike, Adidas and Puma’s focus are on supplier deals with Europe’s elite, leaving market wide open for medium to low value deals.

• Analysis of agreements estimated to be worth over $5 million annually (tier one agreements), showed the perennial top-three to make up for 94.6 per cent of total brand spend on the 44 agreements included in that tier.
• Market share for the top-three for agreements in tier two (between $1 million and $5 million) and in tier-three (below $1 million) drops significantly.

The concentration of value in England’s Premier League has been created by the strength in depth that is enjoyed by the division with a greater number of the biggest teams affiliated. Indeed, seven of the league’s teams feature in the top 20 most expensive European club kit supply contracts. Even the smaller, lower-ranked teams in the Premier League hold significant commercial pull, helped by the division’s global profile.

The presence of Barcelona and Real Madrid, and their giant kit supplier contracts with Nike and Adidas, respectively, sees LaLiga rank second in terms of value of club kit supply agreements. The German Bundesliga, meanwhile, despite having two fewer teams in its league than France’s Ligue 1 and Italy’s Serie A, generates the third most in kit supply value. Clubs in the Bundesliga are able to generate more in kit supply agreements than other divisions due to their larger fan bases and attendances.

Between Ligue 1 and Serie A, GlobalData’s sport analysts estimates the 20 teams in the top-tier of French soccer to generate more in kit supply value, although this is mostly down to the league’s most expensive agreement, between PSG and Nike, being worth almost $40 million more than that of Italy's most expensive agreement between Juventus and Adidas.

Of the 15 leagues analysed, 89.85% of kit supply value is concentrated in Europe’s top five leagues in England, Spain, Germany, Italy and France.

Outside of the big five leagues, the 18 teams competing in the Dutch Eredivisie are estimated to take in the most in terms of kit supply value, ahead of Turkey’s Süper Lig and the Russian Premier League.

The 20 most lucrative European club kit supply agreements for the 2020-21 season amount to an estimated $1.19 billion in value, making up a considerable 75.32 per cent of the total estimated kit supply value from the 15 leagues analysed. The concentration of the kit supply value in Europe’s most elite clubs goes some way to displaying their commercial dominance on the continent. The top 10 agreements amount to an estimated $987.52 million in value, a 62.65 per cent share of the total.

Barcelona and Real Madrid lead the way, with LaLiga rivals Atletico Madrid also in the top 20. It is Premier League teams, though, that most regularly command the highest kit supply fees, with seven in the top 20. Indeed, five of the ‘big six’ - Manchester United, Liverpool, Manchester City, Chelsea and Arsenal - feature in the top 10 most lucrative agreements. There are three representatives easch from France and Italy, two from Germany, including Champions League holders Bayern Munich and one each from Turkey (Galatasaray) and Ajax (Netherlands).

Within the top 20 agreements featured, five new kit supply contracts kicked in for the 2020-21 season, with all representing sizeable increases in value on their previous deals.

Liverpool, after a long court battle, made the switch from New Balance to Nike with analysts estimating the value of the agreement for the 2020-21 league season to lie somewhere in the region of $90 million, a 70.73 per cent increase in annual value from the previous contract. Local rivals Everton also achieved a similar increase in value (67.2 per cent) for their new agreement with Danish sportswear brand Hummel. Everton were previously with domestic supplier Umbro.

Real Madrid, Borussia Dortmund and Lyon each entered into new contract extensions with their respective suppliers. Real Madrid’s renewal with Adidas represents a huge increase of 242.86 per cent, with Dortmund achieving a similarly impressive 213 per cent increase in value with Puma and our sport analysts estimating Lyon to have achieved a 30 per cent increase in the value for their renewal agreement with Adidas.

These are extracts taken from the GlobalData 2020-21 European Club Soccer Kit Supply report