In October last year, Liverpool won a contract renewal lawsuit with New Balance, and the eight-year cooperation between the two sides (including its Warriors Sports) came to an end. In January of this year, the club officially announced the cooperation with Nike, which will become the official jersey supplier of the Red Army from the 2020-21 season.
In this long sponsorship dispute, we found many interesting details. For example, this is the first time that the details of a jersey sponsorship contract have been disclosed through official channels. Another example is that Nike's sponsorship to Liverpool is "only" 30 million pounds per year, and New Balance provides almost the same contract but was sentenced to "unmatched."
What are the exciting inside stories about this lawsuit? It seems that the amount is so low, why is the public opinion saying that Liverpool has won the highest sponsorship in the Premier League? Behind everything is the game of capital or moral controversy? Welcome to "Today's Statement: The Lawsuit Caused by Grabbing Money".
Thanks to the dossiers published by the High Court of England and Wales and the trial summary published by Hausfeld, New Balance's acting law firm, so that ordinary people like us can have a better understanding of the mysterious world of jersey sponsorship.
As we all know, there is a “matching clause” in the sponsorship contract that New Balance and Liverpool are still fulfilling, which means that if a new sponsor wants to sign with Liverpool, as long as New Balance can propose the same matching contract, then Liverpool must choose with it. Renewal.
众所周知，赞助合同中还有一个“匹配条款”，New Balance和利物浦仍在履行，这意味着如果新赞助商想与利物浦签约，只要New Balance可以提出相同的匹配合同，那么利物浦必须选择它。续订。
According to this clause, Liverpool submitted a contract signed with Nike to New Balance on July 11, 2019. This is a contract that both parties have reached an agreement and signed and confirmed. As long as it is not intercepted by New Balance because of the "matching clause", it will come into effect.
The main contents of this contract related to the case are as follows:
1. Nike gives Liverpool a basic sponsorship fee of 30 million pounds per year.
2. Guarantee to provide Liverpool with a promotion that is not lower than the highest level of the brand's Premier League, specifically at least Chelsea and Tottenham grades;
3. At least two of its brands will launch Liverpool products. Nike named this brand and Converse as examples;
4. Cooperate with third parties to launch joint products, the main partners include other sports teams in the United States;
5. Invite at least three of the world's top non-football super giants to promote Liverpool's products, such as LeBron James, Serena Williams and rapper Drake;
6. Guarantee to sell Liverpool products in more than 6000 stores around the world, of which at least 500 are owned or controlled by Nike, and the market potential can reach 13,000. In addition, the Nike official website in no less than 51 countries/regions provides the sale of Liverpool licensed products.
Then, New Balance provided Liverpool with its own matching offer on August 16, which can be called a copy of the Nike contract.
At the end of the year, the price is also 30 million plus the same percentage commission, providing the top promotion of the same brand in the Premier League (in fact, Liverpool itself), providing products under the two brands of New Balance and Warriors Sports, cooperating with a third party to create a joint model, and inviting at least three non-soccer Chaoju Promotion Products
It can be said that except for the name, everything else is basically copied.
Liverpool reacted a week later. They believed that the so-called matching offer by New Balance violated the "principle of good faith" in British law. Simply put, there were two promises that they could not do at all.
First of all, New Balance said that it can also provide three top non-football super giants to promote the product, but they do not have this level of resources at all. The evidence is that a name is not written in the contract.
Secondly, New Balance said it can also provide 6000 stores including 500 self-operated stores to sell Liverpool products, but in the sales data they provided in 2019, there were only 178 self-operated stores and 2,797 non-controlled stores. It is simply bragging to double to Nike's level after just one year.
The two sides fought for several rounds and finally went to court. In the end, the High Court of England and Wales ruled that New Balance lost the case, and Liverpool signed with Nike as hoped.
The court’s decision was based on the following:
First, the court did not support Liverpool's argument that New Balance cannot reach the size of Nike stores. This is because New Balance provided a series of internal meeting minutes and supporting documents, indicating that after the company's discussion, it did find a feasible plan to substantially increase the jersey sales store in the future. The "principle of good faith" only applies to deliberate failure to do it and concealing that one cannot do it, and does not apply to good faith situations that try to do so;
首先，法院不支持利物浦关于新百伦无法达到耐克商店规模的论点。这是因为New Balance提供了一系列内部会议记录和支持文件，表明在公司进行讨论之后，它确实找到了切实可行的计划，以在将来大幅增加球衣销售店。 “诚实信用原则”仅适用于故意不这样做而隐瞒自己不能做到的情况，不适用于试图这样做的真诚情况；
Second, the court supported Liverpool's claim that New Balance has no cross-border super giants to promote. Although the actual benefits brought by the top super giants are difficult to accurately measure, they are still significant and can be estimated.
Simply put, who told you that you don't have James.
The loss of Liverpool is undoubtedly a major blow for New Balance. Especially when the two sides held hands back then, there is quite a feeling of giving charity in the snow.
Around 2010, Liverpool fell into a double trough in performance and economy under the leadership of the "dog blood duo", and once came to the brink of bankruptcy and liquidation. Although American businessman John Henry succeeded in renewing his life after acquiring the team, the decline on the court is difficult to immediately improve. In the 2011-12 season, the Red Army was so miserable that they only took 8th place in the Premier League. Adidas, who could not see hope, chose to withdraw without looking back. The veteran giant Liverpool could not find a suitable top jersey sponsor for a while.
In this dilemma, it is New Balance's Warriors Sports that lends a helping hand.
At that time, the Warriors Sports was just an American company focused on ice hockey and hockey. They signed Liverpool for six years at a price of 150 million pounds, which shocked many insiders. With this high enough starting point, Warriors Sports signed Porto, Sevilla, Stoke City and other teams in the next few years, and recruited stars such as Kompany and Fellaini as spokespersons. , Fully enter the football circle.
Watching its Warriors Sports gradually become famous, old rivals Adi and Nike gained a lot of exposure and real money in the football circle, especially during the World Cup, New Balance finally couldn't sit still.
In February 2015, New Balance launched a new brand and new company NB Football, and held a major press conference for its official return to the football stadium in London. Half a year later, they withdrew most of their football business from their younger brother, including changing the brand logo on Liverpool's chest from Warrior to capital NB.
2015年2月，新百伦（New Balance）推出了新品牌和新公司NB Football，并举行了一次重要的新闻发布会，正式回归伦敦足球场。半年后，他们从弟弟那里撤出了大部分足球业务，包括将利物浦胸口上的品牌标志从勇士队更改为首都NB。
Interestingly, Liverpool really became more and more NB on the court after the jersey change. In the 2017-18 season, they reached the Champions League final. In the 18-19 season, they were runners-up with the highest points in the history of the five major leagues, and won the sixth Champions League in team history. They have been in the Premier League this season, and they are about to end a 30-year wait.
What about New Balance?
The results they have achieved after playing football is far from the reputation and pocket double-line red as the jogging circle. Due to the excessive focus of the market in the United States and the lack of good channel relationships with jersey dealers around the world, New Balance can only rank behind Adi, Nike, and Puma in the football circle, and watch the "Big Three" take 70. % Of the market.
The most notable performance is that they have only 178 self-operated stores and 2,797 non-controlled stores selling the products of their leading football club, Liverpool. Even this data has been doubted by many people. For example, all stores in Ecuador have not sold a single Liverpool jersey in a year, or if we go to a domestic New Balance store, the probability of seeing a Liverpool jersey and Leonard sneakers is the same, ≈0.
The cooperation between Liverpool and New Balance should have been a history of revival hand in hand. It's a pity that New Balance's development in the football circle is too slow. As a football club, Liverpool cannot bear to miss the peak of the results of the past few years, and slowly wait for the unknown future.
Therefore, they can only choose to do business in business. Say goodbye to the past and plunge into Nike's new embrace.
This contract between Liverpool and Nike can even be said to be an exaggeration to create a new model of club shirt sponsorship.
In the past, the jersey sponsorship signed by the club was also in the form of fixed + share + bonus, but it is rare to choose low fixed + high share like Liverpool's new contract.
Take Real Madrid, which often competes with Barcelona for the boss on the shirt sponsorship list, as an example.
"Der Spiegel" once exposed a 140-page draft contract between Real Madrid and Adidas, in which the annual fixed sponsorship amount is 70 million euros, and the product sales share is 22.5% of the gross profit, which is estimated to be around 30 million euros. Later, it is said that the contract amount has increased, and the total price after the achievement bonus is about 120 million per year. If you take into account the year-on-year increase in jersey sales, the end of the contract is estimated to reach 150 million euros in a single season.
It seems that Liverpool’s 20% share is not as high as Real Madrid’s 22.5%, but the key is that their share is based on net sales (Net Sales, sales minus discounts and returns), rather than Real Madrid’s gross profit (Gross Profit, net Sales minus costs).
This method of low fixed amount + high share clause has brought new inspiration to the industry.
On the one hand, if the club achieves outstanding results or signs a big-name star, it will be able to get more realistic benefits on the basis of stimulating jersey sales. At the same time, this "performance award" allows the club to no longer worry about "suffering losses" due to the future development of the jersey market when signing a long-term contract. For example, Arsenal signed a 7-year long-term contract with Nike in 2003 to build the Emirates Stadium, but the main component is a fixed amount. By the end of the contract, the seemingly attractive figures that year have been far away from rivals such as Manchester United.
On the other hand, if the club is in a long-term downturn, brand owners can appropriately avoid the risks caused by the decline in influence. The football world is so cruel. Although the sales of jerseys mainly depend on the influence the team has accumulated over the years, it is also directly related to the performance and the strength of the lineup. A short-term decline in one or two years often doesn't mean much, and it is more uncomfortable to be lonely for many years.
In addition, this model allows both clubs and sponsors to participate more actively in marketing activities including third-party joint names. Nowadays, brand co-branding has become a marketing hot spot that detonates social media at every turn. In the football circle, Paris, located in the fashion capital, is one of the best.
Commune De Paris, Manish Arora, BAPE, Edifice, Parachute, and Nike’s own Air Jordan. Paris successfully broke the circle several times in the past year, leading a new trend. After switching to the Nike camp, which is very good at this kind of operation, many people have begun to imagine what novelties will be created by various street fashion brands such as Liverpool and Converse...
巴黎公社，Manish Arora，BAPE，Edifice，Parachute和耐克自己的Air Jordan。过去一年，巴黎成功地打破了这一圈，引领了新趋势。切换到耐克营地后，这种营地非常擅长此类活动，许多人开始想象利物浦和匡威等各种街头时尚品牌将创造什么新颖性……
What are you waiting for? Buy, buy, buy and it’s over!
Of course, this model must have its shortcomings. For example, there is a bit of "send umbrellas on sunny days and close umbrellas on rainy days", and when a giant like Nike enters the game, latecomers like New Balance are really unable to hold their ground.
But the same sentence: in business. At least Liverpool is in the limelight now, and Nike has enough resources and brains. Let us first see how much energy the cooperation between the two can explode!