Nike lines up £1bn kit deal with Manchester United and hated owners the Glazers

Goodness knows what Manchester United fans make of it: the US Glazer family, who bought the club with its own money and lumbered it with £600m of debt, are beginning to see the fruits of their labours, if such they can be called.

No sooner has Chevrolet signed a $559m (£347m) deal to have its name plastered over Man U shirts for seven years than shirt supplier Nike is reported to be renegotiating its deal to supply same shirts, currently worth £303m ($487m) plus profit share to Man U over 13 years. So, the speculation goes, at Chevy rates a new 13-year deal with Man U would cost Nike a cool $1bn (£622m).

So where does £1bn come from? Well at the rate these things seem to be inflating maybe the few months since Chevy signed its deal has seen the value of Man U rise still further, but that’s unlikely (if it has then departed General Motors CMO Joel Ewanick, who lost his job over the deal, actually secured a bargain). Or is it just British journalists rounding things up?

More likely it’s speculation that Nike, currently reeling (one would have thought) from the Lance Armstrong scandal, needs Man U and will be prepared to pay over the odds for another long-term term deal. It’s supposed to be lining up a £156m deal to sponsor golfing tyro Rory McIlroy for ten years from 2013 (just one golfer who might get his hand trapped in the door) so it’s not afraid of big money.

The trouble with this argument is that there are only two contenders to make Man U’s shirts at these kinds of rates, Nike and Adidas. And Adidas doesn’t usually pay this kind of money, it’s unlikely that it could. Adidas advertising and promotion is built around its sponsorship of the World Cup and the Olympics, a policy that used to make it prey to Nike’s ambush marketing but one which now looks quite smart.

At the recent London Olympics the organisers cracked down Stasi-style on such wheezes so Adidas did well out of it. Nike, on the other hand, finds itself paying ever-higher prices in a market that’s only going one way.

Whether it’s £1bn or $1bn (pro rata, the deal probably won’t be for another 13 years) the Glazer family will finally be able to bank the big bucks they bet Manchester United’s money and reputation on. Which would make you feel a bit sick of you’re a Man U fan. Still, maybe there’ll be something left over to sign a midfielder or two.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.