The news that Chelsea have signed a new kit deal with Nike for a reported £60 million A SEASON once again puts into perspective how money is dominating the highest level of our national game. The Blues terminated their existing deal with adidas six years early in what can have only been a purely money-motivated move (that deal was rumoured to be “just” £30 million a year) to sign the deal with Nike for the next fifteen years, which will see them earn £900 million (assuming there are no other bonus elements for winning cups). Chelsea Football Club’s understated comment about the deal was that it was an “incredibly exciting and important deal”.
The club’s PR machine smoothly communicated the right words such as “We believe Nike will be able to support our growth into new markets as well as helping us maintain our place among the world’s elite football clubs.”
Based on their disastrous season last term it is hard to see how they justify their place in the world’s elite, unless it is purely down the revenues. However, what is clear is that the value of this deal will set a new marker for every other club. If Chelsea’s deal with Nike is now worth a reputed £900 million, that puts a marker in the sand for the next round of negotiations for other clubs. Manchester United, Real Madrid and Barcelona are already in the £100 million a year club thanks to their deals.
On top of these huge amounts are the revenues club earn from sponsorship and shirt sales. According to Forbes, Chelsea’s current deal with Yokohama Rubber is worth around £35 million at the current exchange rate, which pales into insignificance compared to the £50 million per annum that Manchester United get from Chevrolet. Whilst United may be considered the most valuable sporting brand in the world, Chelsea recorded more shirt sales in the last 12 months after seeing a 39% rise in sales, taking them into third place behind Barcelona and Real Madrid, with an eye-watering 3.1 million shirts sold (according to Sports Marketing Company Euromericas).
So let’s do the maths on those. The current Chelsea shirt retails online (JD Sports) at £55 for an Adult shirt and £30 for a Children’s shirt. The club will maximise the revenues sold via their official outlets, receiving only a small proportion for those sold elsewhere. But even if the average revenue from a shirt, blended across an adult and a children’s shirt, is £15 then they would have reaped £46.5 million last year.
Assuming shirt sales stay roughly the sale in the next twelve months Chelsea can expect to receive over £140 million per annum. Add in the huge amounts Premier League clubs receive through TV revenues and other commercial revenues (Singha – Global Beer Partner, Beats – Global Sound Partner and so on for virtually every category known to man) and
Whilst match day income for the Blues was just over £70 million in the 2014/15 season, the core ticket revenue would have been around £33million per annum (assuming an average ticket price of £40)…in other words around the same as the increase in revenue they are now getting from Nike. So if Chelsea really wanted to show how much they appreciated their fans they could admit them all for free this season and not see any drop in revenue. Is that likely to ever happen? Of course not!