A number of European football (soccer) clubs have been taking licensing, retail, and other rights in-house as their previous contracts with leading sports sponsors and licensees end:
- In the latest example, Italian club Inter Milan took retail and licensing rights back from Nike in November 2019. Chinese retailer Suning is the organization’s majority owner, which has led to theories that breaking ties with Nike could free Suning to distribute Inter Milan products in China. Club leadership cited opportunities to generate new revenues, have those revenue streams go back to the club directly, and expand internationally as reasons for the decision.
- AS Roma announced it was taking control of its merchandise sales rights in January 2019 after acquiring AS Roma Merchandising, the company Nike founded in 2013 to handle licensing and retail operations for the club. Nike had been a sponsor of AS Roma for 10 years, but the club had publicly declared its unhappiness with the agreement.
- FC Barcelona was among the first of the recent group of European football clubs to take more control of its merchandising fortunes when it launched Barça Licensing & Merchandising to handle its retail and licensing rights in 2018. It had worked with Nike for more than 15 years. In announcing the move, leadership said the new configuration would result in better profitability, more control over brand image, a better brand experience for fans, and more innovation. The club reported its merchandise generated €65 million (U.S. $76.3 million) in annual sales in 2018; that number fell to €63 million ($69.3 million) in 2019.
- In a somewhat different strategy from the others, Real Madrid renewed its contract with Adidas for €1.1 billion (U.S. $1.2 billion) in September 2019 but in the process took control of its retail business, which Adidas previously handled. The club then expanded its relationship with Fanatics, which now oversees Madrid’s physical stores in addition to the ecommerce activities that were its primary focus. At the same time, the Fanatics deal, which runs only through the 2019/2020 season, was renegotiated to give more supervision and control to the club.
These are not the first European football organizations to take steps to manage their own destiny. Back in 2014, for example, Juventus announced it was purchasing Juventus Merchandising—the company Adidas launched to handle the club’s business after becoming its kit sponsor—renaming it Piemonte Merchandising. Juventus has seen its revenues rise since then.
Of course, many clubs still work with sportswear companies such as Adidas, Nike, Puma, Umbro, Under Armour, New Balance, Kappa, and Erreà, as well as Fanatics, for kit sponsorships, licensed products, and/or retail management. Several have switched suppliers in the last year or two; PSV Eindhoven signed with Puma (replacing Umbro) and Liverpool with Nike (replacing New Balance), to name two deals signed just this month. Few have yet followed in the footsteps of the organizations listed above in opting for in-house control of merchandising, but that may change in the future, especially if these recent moves prove successful.
This month’s Raugust Communications’ e-newsletter will be distributed next Tuesday, January 21. If you have not yet subscribed to this free publication, you can sign up here. Visit our archives of past Licensing Topics of the Month and Datapoint research spotlights to see the kinds of content featured in the newsletter each month.