Nike has announced it will end its shirt manufacturing deal with Manchester United after the 2014/15 season.
The US sportswear company has worked with the Premier League club for the past 13 years but will end its partnership next year. The firm said in a statement that it felt the terms of the renewed agreement did not represent good value for the company and its shareholders. The announcement comes after Manchester United released images of their new shirt for the coming season, the first with new sponsor Chevrolet.
According to the Financial Times, adidas is primed to take up Nike's contract. The German company is primed to sign a contract to supply Manchester United's kit for the next ten year in deal worth £750 million. The club approached rival companies after Nike's period of exclusivity to extend its partnership expired and it subsequently decided against exercise the option to match any competing offer.
Should the former Premier League champions sign a deal with adidas it is likely to dwarf the German company's current agreement with Real Madrid where it pays the La Liga club a reported £31 million a season.
Nike said: "Any partnership with a club or federation has to be mutually beneficial and the terms that were on offer for a renewed contract did not represent good value for Nike's shareholders. We look forward to a successful final season with the club."
The 2013/14 season represented the first time Manchester United did not qualify for the Champions League in 19 years. Following the disappointing campaign, manager David Moyes was sacked and subsequently replaced by current Netherlands national team coach Louis van Gaal.
As the new Premier League season draws closer, Manchester United have already been involved in the transfer market bringing in Southampton's Luke Shaw and Athletic Bilbao's Ander Herrera.
Manchester United's share price on the New York Stock Exchange closed 1.29 per cent down at 17.61 on July 8th.
Find up to date information on spread betting strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.