Football kit sponsorship is big and complex business. Simplistically put, it is a high-technology driven piece of apparel meant to make the players comfortable during their matches. Looking at it in a larger perspective, it is one the biggest sponsorship asset for the club and potentially the biggest revenue generator. For the fans, it is an emotion. A passionate recognition of love for their favourite club. Every season, fans wait for to grab a piece of their favourite team’s or players shirt. There’s even a whole bunch of discussions on the design and look!
It is an industry worth billions. From a very modest start with local manufactures often with no finances involved and no contracts, it has come a long way to become a very big business. And this does not include the replica market, that is an industry on its own.
In this blog, we will break down various parts of the kit sponsorship and the business behind.
The Manufacturers
It’s hard to pinpoint the exact number of football kit market-size including replicas, but multiple research reports state it to be anywhere between USD $100bn – $150bn per year and is projected to reach over $208 billion by 2025. Football jerseys, being one of the most popular sportswear items, play a crucial role in this growth. A report by Business Research Insights highlights the regional breakdown:
- North America holds a 28% market share in 2023 and is the third fastest growing market fueled by increasing popularity, focus and high participation.
- Believe it or not, Asia-Pacific accounts for around 30% of the market share and is the fastest growing market. This rate of growth may be attributed to the large population with expanding fanbase and increasing sports infrastructure investments in countries like Japan, China, and Australia.
- Europe represents the second-fastest growing market with about 25% of share. This os largely driven by the long-standing popularity of football in these regions.
- Rest of the World including Australia, Africa and South-American continents covers around 17% of the global market and showing steady growth due to rising interest.
For the team, financial agreement with a kit supplier is one of the biggest sources of revenue. In such a market, it’s all about dominance. As per GlobalData, PUMA overtakes Nike and Adidas as the most prominent suppliers across the ten biggest leagues in European club football. In 24/25 season, the German brand has 28 active partnerships, two more than Adidas and four more than Nike, with a combined annual spending of $242.76mn. In the big five leagues, Nike, Adidas and Puma have established themselves as the biggest players covering 48 ‘big five’ league clubs between.
In all, there are 21 kit manufacturers who will be responsible for the kit supplies to all the ‘big five’ league clubs considering NOCTA by Drake, a sub-brand of Nike, the kit partner for Venezia FC, a separate brand. 10 manufacturers cover 85 clubs and 9 manufacturers are associated with one club each, most unique of them being Emporio Armani, the fashion house’s first foray into athletic wear in association with Napoli, Lecce’s in-house brand M908 and of course NOCTA.
The Value Behind
When we speak about kit sponsorship deals, one of the first things that comes to mind is the amount of money they can generate for football clubs. Typically, it works in two ways, one is a fixed component of the corporate sponsorship which is the larger part and the second part is share from merchandise which is customized to each club but typically lies between 5% to 20% (the highest, reported for Liverpool). From 25/26 season, Liverpool confirms moving on from Nike and back to Adidas, their old partner. The new deal will reportedly see them pocket more than UK£60m per year and lesser share of merchandise.
As per Football Benchmark, in 2023/24, the top 10 kit suppliers who struck deals with 82 ‘big five’ league clubs paid €1.1bn as the fixed sponsorship value! The UEFA European Club Benchmarking report gives a snapshot of the value of kit sponsorship plus shirt sales stake to the top 10 clubs.
At this point, it’s important to clear the myth that many fans in general have about shirt sales covering the transfer fee / player fees. This is not the case. As mentioned above, the club gets a share of the merchandise sales which lies mostly in the range of 5% to 10% and in some cases, it goes upto 20% with low fixed component sponsorship. So typically, if a 1mn replica shirts of big signing player is sold at €80 per shirt, then the club would be getting 5% of the total amount, i.e. €4mn.
A module on sponsorship strategy of clubs in our Master in Football Business Management program deals extensively with the kit sponsorship and gives an in-depth understanding of the subject and its impact on revenues in modern football. The program is designed to optimize your career opportunities in the football business industry. You can read more about the program here
Share of Commercial Revenue
At one point, rumors started floating that FC Barcelona were ready to move away from their long term partner Nike and producing their own kit once their existing deal completes its term in 2028. Now, a decision like that is very complicated considering the logistics, marketing and retail challenges and most importantly, production expertise and experience. There’s also the kit technology factor. We have recently seen how Aston Villa players have complained about the sweat drenched shirts.
This led us to analyse what is the kit sponsorship value as a percentage of total commercial revenue which includes sponsorships, retail merchandising and licensing, see chart.
In Conclusion
The mere football kit has transformed itself into an integral part of the club’s all-round growth from becoming a marketing tool to transforming the way clubs plays through its integrated technological development and of course, adding to revenues.
For the humble fan it might still be an emotional connection with his club but for the club’s ‘data-driven marketing’ point-of-view, the shirt sale is an integration of behavioral data-points of the fan.
