Explaining Barcelona’s New Nike Partnership: Is It Really Worth €1.7 Billion? And Is It Bigger Than Real Madrid’s?

Last weekend, Barcelona revealed a renewed multi-year contract with Nike, extending and enhancing an agreement that was originally set to expire in 2028. In recent months, Barcelona’s president, Joan Laporta, has repeatedly claimed that he would secure the “largest deal in global football,” and the updated agreement is now believed to be worth €1.7 billion (£1.4 billion; $1.8 billion) over the next 14 years, lasting until 2038. This deal could provide a significant boost to the club’s financially troubled and intricate situation.

The confirmation of this deal marks the end of a year-long saga that strained relations between the Catalan club and the American sportswear company. However, it remains unclear if this new arrangement will provide immediate relief from Barcelona’s ongoing challenges with La Liga’s salary cap rules. One of the most pressing issues is whether last summer’s signings, Dani Olmo and Pau Victor, can be officially registered to play for the team in the second half of the current season.

The Athletic reached out to individuals both within and outside Camp Nou, all of whom requested anonymity to preserve their relationships, to assess whether this deal will be beneficial for Barcelona.

What Did Barcelona Say?

In their announcement on Saturday, Barcelona stated: “This new agreement solidifies Nike as a key partner of the club and the official technical sponsor for all professional and amateur teams, introducing a distinctive model that enhances brand affiliation and drives the expansion of the global retail and licensing business.”

What Are the Financial Terms of the Deal?

Barcelona confirmed to The Athletic that the specifics of the deal are confidential, but sources within the club revealed a total value of €1.7 billion over the next 14 years.

The contract will be structured in two phases. The first phase, running from 2024 to 2028, will see the club receive approximately €108 million (£90 million; $115 million) annually for the next four years—almost double what they earned in recent seasons. From 2028 onwards, that amount will rise to around €120 million per year for the next decade.

Additionally, Barcelona will receive a €158 million ‘signing bonus’ spread over the 14 years of the agreement, including the current season.

The club views this deal as a major win after challenging negotiations, ensuring that the majority of the promised annual income will be paid, regardless of the team’s performance on the field. Under the previous agreement signed by former president Josep Maria Bartomeu’s board in 2016, although the deal was publicized at €105 million per year, the club only received between €50 million and €60 million when the team’s performance, such as early exits from the Champions League, didn’t meet expectations.

What Is Nike Saying About the Deal?

Nike and Barcelona have enjoyed a close partnership since their initial agreement in 1998. When approached by The Athletic for a comment on the contract extension, Nike expressed enthusiasm about continuing their longstanding relationship.

A Nike representative stated: “We’re excited to build on our collaboration at all levels, from grassroots football initiatives that inspire and empower young players to elevating FC Barcelona as a global symbol of style and culture. We’re especially committed to advancing the growth of women’s football, and our partnership with FC Barcelona’s women’s team highlights our shared commitment to equality and inclusivity in sports.”

However, Nike refrained from disclosing specific details regarding the financial or business aspects of the agreement.

What’s the Positive Perspective on the Deal?

The €1.7 billion headline figure is substantial, even by the standards of high-value kit deals in elite club football. It marks a significant improvement over Barcelona’s previous earnings from Nike, providing a crucial boost to the club’s revenues and offering hope for an enhanced financial outlook in the years to come.

For many at Camp Nou, the inclusion of the signing bonus also means that Barcelona has achieved Joan Laporta’s long-standing goal of surpassing Real Madrid’s €120 million annual deal with Adidas, widely regarded as the most lucrative in global football.

This development strengthens the current board’s argument that they are making progress in addressing the financial issues inherited from the previous administration.

What’s the Reality Behind the Deal?

It is unusual in football for a club to renegotiate a kit deal with four years still remaining. However, Barcelona’s board identified the agreement with Nike as a potential opportunity to boost their revenues by injecting more funds into their annual accounts.

Nike, however, would only agree to a new deal if it was beneficial for them, and tensions had arisen within the American corporation due to the way they were treated during the negotiations, including Barcelona’s failed attempt to find a legal way to exit their previous contract.

Joan Laporta and his top executives took charge of the talks that led to the announcement over the weekend. Interestingly, full details of the agreement were not shared with the board until last Friday, just before the vote to approve it.

Some industry experts consulted by The Athletic expressed doubts about the figures being reported, with skepticism in Madrid regarding whether Barcelona’s deal would truly surpass Real Madrid’s. Additionally, there were concerns about how the new deal might impact Barcelona’s Barca Licensing and Merchandising (BLM) division, with the announcement suggesting a more prominent role for Nike in this part of the club’s business.

Since its launch in 2018 under former president Josep Maria Bartomeu, BLM has been highly successful, generating €179 million from kit and merchandising revenues—the highest of any European club according to UEFA. There are worries that Nike’s increased involvement in the club’s casual wear and other merchandise lines could reduce the amount of profit flowing into Barcelona’s coffers. However, club sources have denied these concerns, assuring that profits will not be negatively affected.

What’s the Latest on Barcelona’s Salary Cap Situation?

As in recent years, Barcelona faced significant challenges this summer in securing the registration of all their squad members with La Liga. This included Spain international Dani Olmo, who joined from RB Leipzig for €60 million, and young striker Pau Victor, a €2.7 million acquisition from Girona.

Both players were only registered at the last minute using La Liga’s financial rule 77, which allows for the temporary replacement of injured players (in this case, Andreas Christensen). However, their registration was only valid until December 31, meaning the club must find additional funds if they want either player to participate after the winter break.

In early September, Joan Laporta revealed that Barcelona was “€60 million away” from reaching a financial position where La Liga would allow them to sign and register players normally. A few weeks later, it was disclosed that the club’s auditors had required a write-down in its 2023-24 accounts for the struggling ‘Barça Vision’ subsidiary, which oversees its media rights and future ventures.

As a result, Barcelona now needs to raise an estimated €120 million to bring its finances in line with La Liga’s salary cap for the current season.

How Might the New Nike Deal Impact Barcelona’s Financial Situation?

When questioned about the challenges surrounding Barça Vision, Joan Laporta frequently pointed to the potential financial boost from a new kit deal as part of the solution. The expectation was that a €100 million-plus ‘bonus’ could cover much or all of the immediate financial gaps created by the failure of the Barca Studios lever.

However, the agreed deal now spreads this bonus over its 14-year duration, meaning Barcelona will receive only an estimated €9 million in 2024-25, in addition to the €40 million in regular revenues over the course of the season.

Sources within the club have informed The Athletic that while the new Nike deal provides some relief, it does not fully resolve the issues related to Barca Vision. Consequently, the club is still seeking additional investors for the project. There remains optimism at the top levels of Camp Nou that this will be successful, and player sales will not be necessary in the upcoming winter transfer window. However, as has often been the case under the current leadership, it is expected to come down to the wire.

What About the Long-Term Impact?

The general consensus is that the new Nike deal aligns well with Laporta’s strategies during his second term as president. The club is securing upfront funds that can help address immediate financial shortfalls and continue investing in the squad.

However, multiple industry sources have raised concerns about the long-term implications of the deal, noting that Barcelona is now locked into the agreement for another 14 years. With inflation and market changes, the €127 million annual sum may lose its value by 2034. As one former board member cautioned, “This deal could tie the hands and feet of the next president.”

Despite these concerns, there is an acknowledgment that Barcelona’s current financial state leaves little choice. The figures reported by the club are seen as impressive and crucial for its survival. One key figure in the club’s ‘entorno’ (supporting circle), who has not always supported Laporta’s leverage strategies, stated, “Financially, this new Nike deal is a tremendous boost of oxygen.”

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