The biggest sportswear sponsorship deal in the English Premier League on Wednesday was Manchester United’s with a German brand. On Thursday the trophy passed over to rivals Chelsea Football Club and US apparel maker, Nike (NYSE:NKE).
Nike will become the official kit supplier for Chelsea FC starting with the 2017-2018 season.
The west London team has confirmed signing a kit sponsorship deal with Nike worth £900mln ($1.1bn). That dwarfs the previous title holder, a 2014 deal Manchester United signed with Adidas for £750mln served over 10 years.
The new deal breaks down into £60mln a year for a total of 15 years.
Chelsea, owned by Russian billionaire Roman Abramovich, has been in negotiations with Nike since the football team suddenly ended its association with Adidas in May. That deal will officially end on June 30, 2017.
That earlier deal with the German apparel maker had been worth £300mln over 10 years. To break away from that contract, which was due to run until 2023, the English club had incurred a penalty of about 50mln euros – a figure it will recoup several times over with its new deal with Nike.
The Financial Times reported that Nike had edged out Under Armour (NYSE:UA) for the Chelsea deal.
Coinciding with the Chelsea news, Spanish media reported that FC Barcelona has signed a 10-year extension to its deal with Nike that runs down in 2018 and will be worth £120m a year. If confirmed that will be a combined £1.2bn, still ahead of Chelsea.
Nike shares were down 0.6% at $52.14 on Thursday – close to a 52-week low. Under Armour shares traded down 0.8% at $38.20.