Despite crisis the club is facing, Real Madrid is still attractive for business and brand. Real Madrid is reportedly agreed to renew its contract with Adidas. According to Marca, the value of the new contract reaches 1.1 billion Euros for 10 years. The contract breaks record as the most expensive apparel deals in football previously held by Manchester United and Adidas which was worth 750 million Euros.
Previously Florentino Perez was not happy with fact that Real Madrid got lower contract than Manchester United despite their continuous success in Europe. So he wanted a renegotiation. Nike and Under Armour joined the competition, but Adidas won the deal.
With the new contract, Real Madrid will get 110 million Euros per year. The number could increase to 150 million Euros as Real Madrid receives 22.5 percent commission from merchandise sales. The amount even exceeds sponsorship from Real Madrid's main sponsor, Emirates, which worth 70 million Euros per year.
Seems like Adidas is very satisfied with sponsoring Real Madrid, since the value of new contract is double than the previous one. Previously Adidas paid 52 million Euros per year, now the amount doubled to 110 million Euros per year. Besides massive money from Adidas and Emirates, Real Madrid still has another 16 sponsors.
The value of the Adidas contract with Madrid also has the same value as the amount paid by Nike to become the main NBA sponsor and apparel sponsor with the entire basketball club in NBA. Nike paid 125 million US Dollars or 110 million Euros to all NBA clubs, the same amount as Adidas paid for Madrid. The value of Nike and 21 NBA teams themselves reached US $ 1 billion in 8 years.
Impressive already with the number? But those massive number from sponsor actually accounted for only 18 percent of the total income of Real Madrid. Los Blancos other income come from tickets, broadcasting rights, merchandise. prizes for winning competition, and other contracts.
Football is more than just sports, it is now part of entertainment industry thanks to revolution in broadcasting technology. With billion of eyes watching and million of fans around the world, many brands are competing to sponsor football clubs and players. This, of course, brings good and bad things for football. But that's just reality of the world, money will flow to place where value added is created. And football pitch is now a large stage for global marketing for brands thanks to broadcasting technology. So we have star clubs, star players, idols, and fandom now. Just like music, it's more than mere arts now, it's a multi billion dollars industry thanks to technological advance.
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