The cost of sponsoring a high-ranked football property continues to increase, particularly as brands like Puma and New Balance selectively compete for certain contracts against Adidas and Nike. Furthermore, the sports brands are now preferring to spend more on sports marketing rather than TV advertising because they can save money through the use of social media.
As previously reported, a few weeks ago Puma signed its biggest contract ever with the Manchester City football club, committing itself to pay £65 million (€75.3m-$83.8m) annually, or three times more than its current sponsor, Nike. Puma has also replaced Adidas as the sponsor of the Spanish Valencia CF club for about €4 million a year, and it has just now confirmed that it will take the place of Nike after 23 years as the supplier of the match-ball for La Liga, the major Spanish football league, starting with the 2019/20 season.
Meanwhile, Spanish press reports indicate that Adidas is discussing an extension of its contract with Real Madrid that would be worth €100 million a year. The current deal, which is due to expire in 2020, carries a total value reported at €450 million throughout its ten-year duration. The reported target would still leave FC Barcelona in first place in Spain based on the new ten-year deal that Nike has signed for €155 million per year, starting with the 2018/19 season.
Nike is also said to be negotiating an extension of its deal with the Paris-Saint-Germain team, which expires in 2022, with the prospect of raising the annual fee to €75 million from €25 million. The amount would be comparable to the £60 million (€69.5m-$77.4m) that the Swoosh is paying for Chelsea in the U.K.
Evidently, Nike wants to reach a more dominant position in the U.K. as it is reported to be in advanced negotiations on a contract with the Liverpool team whose value would be higher than the £750 million (€868.8m-$967.2m) fee pledged by Adidas for Manchester United over a ten-year period. New Balance is currently paying £45 million (€52.1m-$58.0m) a year for Liverpool under a contract that expires after the 2019/20 season, and it has the right to match someone else's bid for its renewal. As of today, Liverpool is second only to Manchester City in the English Premier League tournament.