Liverpool are risking losing out on maximising the full potential of their Nike kit deal, which only came into effect at the beginning of this season, if they do not make the top four in the final Premier League standings.
Football finance expert Kieran Maguire has outlined how failing to match the levels of previous campaigns – something made more likely without the arrival of another central defender this month – will have a knock-on effect economically.
“Good news sells merchandise and football clubs are aware of that and everybody at Anfield is striving to achieve that aim,” Maguire told the ECHO on a Blood Red podcast to be released on Saturday, January 30.
“The Nike deal will have bonuses that could be linked to on-field performance as well as the volume of sales, but there is no doubt there is a positive correlation between clubs who win matches and the volume of merchandise sold.
“Fans at the end of the match, even on television, if they feel bad they will go onto social media and moan, and if they feel good, they will be more inclined to say ‘I’m not sure about that third kit but they’ve just won four in a row so I’ll take it on’.
“It is small issues that tilt things and if there are a few people at each match then that adds up over the course of the season.”
Liverpool’s deal with Nike could be worth up to £100m per year, according to experts with knowledge of that field.
It was structured so that Liverpool receive only a guaranteed payment of £30m each season, with the rest of that money coming in the form of a 20 per cent royalty on any products sold.
Liverpool’s previous kit deal with New Balance was worth around £45m per year, but the royalties were expected to at least allow the Reds to get close to Manchester United’s deal with Adidas, which nets them around £75m per season.
Failing to get into the Champions League this season, though, and not building on their success of the past two years, would see the figure Liverpool take home drastically reduced.
*Listen to the latest podcast from Blood Red by clicking HERE.
“Nike will be desperate as much as the fans for Liverpool to get into the Champions League because it is a very good vehicle for displaying the wears of Nike – it’s free publicity in a big match in Europe,” Maguire added.
“It’s only three years ago that Liverpool finished fourth in the Premier League and everybody was really happy with that.
“The achievements of 2019 and 2020 have set a new benchmark and nobody is guaranteed places in the Champions League, which is a good thing.
“While we have a competitive league because of the way the money is distributed, we are looking at five or six into four each season.
“The fact that it isn’t a guarantee helps the clubs because it helps drive viewers and broadcasting negotiations.”
While it might help with television deals and marketing the Premier League, which benefits Liverpool greatly along with the other 19 clubs in the top flight, that is only most beneficial for Jurgen Klopp’s side as long as they remain on top.
Why should I sign up?
Premier League champions Liverpool are looking to dominate again this eason and we’ll have all the latest news on any moves they make in the transfer market.
The main window is closed, but deals with EFL clubs can still be done until October 16.
You’ll get breaking transfer news, analysis, rumours, live coverage and much more.
Liverpool correspondent Paul Gorst will also be sending an extra weekly newsletter with all the latest from behind-the-scenes at Melwood.
How do I sign up?
It’s free, easy and takes no time at all.
- First just click on this link to our newsletter sign-up centre.
- Once you’re there, put your email address where it says at the top, then click on the Liverpool FC newsletter. There are other ones too if you want them as well.
- When you’ve made your choice, press the Update Preference button at the bottom.
That’s it! Your emails will come through to your inbox from that moment on. It’s that simple.
Failing to get back into the Champions League this season – which the signing of a central defender would not guarantee, but at least make more likely – would undoubtedly negatively impact the value of the Nike deal.
And that is without factoring in the direct loss of income in the form of Champions League prize money and matchday revenue, assuming supporters are back inside Anfield by the start of the 2021/22 season.
That is the balancing act that Liverpool must face when assessing the needs of their long-term transfer strategy compared to the short-term requirements that will allow them to meet expectations this season.