As you may have read this month, sports apparel manufacturer New Balance is taking Liverpool FC to court to extend its kit deal with the club. Reports suggest that New Balance matched Nike’s offer, as they were entitled to under a clause in their current contract, only for the Reds to plough ahead with a deal with the Oregon-based manufacturer regardless.
We thought we’d take a look at why New Balance is quite so keen to renew its deal with the club.
As you can see from the chart below, the brand enjoys a much higher Impression score (Do you have a positive or negative impression of the brand?) among British Liverpool fans than the general population. Over the course of the last year, it has scored 50% more highly on average among this group.
But what the chart also shows – and is perhaps the obstacle to an extension – is that New Balance’s deal doesn’t appear to have much clout with football fans more widely. In fact, over the course of the year, the brand scores precisely the same among the general population as it does among football fans, putting it in 12th place in a ranking of other apparel manufacturers (Nike comes first).
But it’s perhaps in overseas markets where Liverpool is seeking more of a presence from its kit sponsor. In China, for example, the Reds are the fourth most popular foreign football team (using our Current Customer metric). And while New Balance is the sixth most popular apparel brand, using an annual average, Nike enjoys a score that is two-and-half times its competitor’s (10.5% v 26.2%; Current Customer).
Now Champions League winners, Liverpool probably feel that New Balance is punching above its weight with a new deal. New Balance probably feel that when Liverpool first started wearing the brand they were closely matched and that they deserve to reap more rewards from their faith in the club. Liverpool finished eighth in the first season they wore New Balance (2015/16), failing even to qualify for the Europa League and were 17 points off the championship pace the next season.
Ultimately, this will be a case for the courts to judge, based on the contract – but the data shows that it’s quite clear what the commercial motivations of each party are.
Photo © New Balance