The protracted saga between to determine Liverpool’s kit supplier starting in the 2020/2021 season continues today in High Court. This will be day two of the three day set of hearings.
There were some interesting nuggets that came out of the first day of hearings last Friday. The Liverpool Echo obtained court documents showing that Liverpool and Nike have already agreed to a design for next year’s kit. Nike have purportedly spent £6 million on material for the kit.
With that amount of time and money already sunk, Liverpool and Nike must feel confident they will win the court challenge from New Balance. While New Balance matched Nike’s £30 million per year base rights deal, Liverpool and Nike are arguing that New Balance can’t match the rest of the valuation or their level of distribution. If you’ve tried to order a kit after August the last couple of years, you’ll probably agree about the distribution part.
New Balance, for their part, have claimed they can match Nike’s promise to get gear into a minimum of 6,000 stores worldwide. Liverpool, however, believe that New Balance are basing their figures on inflated statistics, including stores that only sell footwear or leisurewear rather than the kits themselves. Liverpool’s barrister, Guy Morpuss, claimed these numbers were based on a myth.
“Including these shops in the forecast of 6,000 stores was a technical attempt to get the numbers up and was not in good faith,” declared Mr. Morpuss.
On top of a potential increase in distribution, Nike is adding a 20% royalty on all Liverpool products sold in stores. With the additional revenue, the deal could be worth upwards of £70 a year, with the potential to get closer to £100 when including other apparel if the Liverpool brand continues to stay strong. It’s a gamble, but one that the Liverpool brass feel is worth the risk.
The thread from Mo Chatra below provides a nice breakdown of the potential revenue that could be earned from the deal with Nike if it is approved.
The High Court case between New Balance and LFC/Nike commenced today, and it revealed some interesting information. Most interesting, for me, is that 2.9m replica shirts will be sold this season. That fact puts the Nike deal into a new light for me.— Mo Chatra (@MoChatra) October 18, 2019
Stay tuned for more legal fireworks today. Hopefully the matter will be resolved in relatively short order now.