Premier League club Liverpool FC has cited sportswear brand New Balance’s inability to reach the distribution levels of rival Nike in a High Court battle which began on 18 October.
The club is being sued by the sports brand which argues that it is refusing to honour a renewal clause in New Balance’s current kit supplier contract, which will expire in May.
Liverpool are keen to sign a five year-deal with sportswear giant Nike to become its new kit supplier from the 2020-21 football season. New Balance claims it can match this offer and therefore its deal should be renewed under the terms of the initial agreement.
Court documents put the club’s position as follows: “The club does not consider the New Balance offer to be a genuine one. This is both because of the contrived and unconsidered replication of the warranties and terms in the Nike offer, and because New Balance cannot deliver on those warranties and terms.’’
Court proceedings have thus far centred on the level of global distribution each brand can offer.
The court papers reveal that, in 2018, Liverpool commissioned a review into New Balance’s global reach. It concluded that a brand such as Nike could “super charge distribution” in a way New Balance would not be able to match.
The Liverpool Echo reports that the court has heard how Nike has committed to stocking Liverpool products in 6,000 stores worldwide. Liverpool suggests New Balance has fallen well short of matching this figure, only achieving access to 2,975 stores between the start of its contract and the 2018-19 season. The club believes the level of distribution the brand predicts it can achieve in the next cycle to be ‘utterly fanciful’.
The ability of Nike to utilise global superstars such as Lebron James, Drake and Serena Williams to market products has also been cited in the case.
New Balance agreed to pay £45m ($58.4m) per year to become Liverpool’s official kit supplier in 2011. The last two home shirts produced by the brand have become the highest selling in the history of the club. The team’s on-pitch success has been a key factor in this.
Nike’s offer of a guaranteed £30m per year represents a significantly lower sum than was expected to be achieved by the European champions. However, it is the marketing and distribution potential within the deal which has proved decisive in attracting Liverpool.
The Athletic reported that the club sees its relationship with New Balance as beyond repair, whilst Nike has already spent $6m on material for the already-designed 2020-21 season kit.