Nike to end kit supply deal with Man Utd - source

LONDON Tue Jul 8, 2014 1:36am IST

The company logo of Nike is shown at the U.S. Olympic athletics trials in Eugene, Oregon June 21, 2012.  REUTERS/Mike Blake/Files

The company logo of Nike is shown at the U.S. Olympic athletics trials in Eugene, Oregon June 21, 2012.

Credit: Reuters/Mike Blake/Files

Stocks

   

LONDON (Reuters) - U.S. sportswear company Nike will not renew a long-running kit supply deal with English soccer club Manchester United because of the cost of a new contract, a source with knowledge of the negotiations said.

Nike has been supplying United's famous red shirts since 2002 but the current agreement expires next year. Its withdrawal is expected to clear the way for the club to sign a lucrative new deal with German sportswear company Adidas.

"Clearly Nike's football business is booming and they could easily afford to do this (deal). They had the right to match any other offer but looking at the deal on the table, they will walk away as it doesn't make commercial sense," the source said.

United got around 38 million pounds ($64.7 million) from the Nike deal in 2012-13, including its share of profit from the sale of merchandise around the world.

Media reports had suggested the club was looking for a new deal worth around 60 million pounds per season.

Nike and Adidas are battling for supremacy in the soccer kit industry, with the American company having made big inroads into a sport that its German rival long dominated.

United, owned by the American Glazer family, are looking to rebuild after a disappointing season in which the 20-times English champions finished only seventh in the Premier League.

The club has installed Dutchman Louis van Gaal as their new manager and he will take charge after the World Cup where he has steered the Netherlands to the semi-finals.

Adidas and Man Utd both declined to comment.

($1 = 0.5877 British Pounds)

(Writing by Keith Weir, editing by David Evans)

Reuters Showcase

IS Claim

IS Claim

Islamic State says beheads second Japanese hostage.  Full Article 

Ukraine Crisis

Ukraine Crisis

Death toll mounts in Ukraine fighting after peace talks fail.  Full Article 

Fifth Title

Fifth Title

Djokovic reigns supreme at Australian Open.  Full Article 

Journalist Freed

Journalist Freed

Jailed Al Jazeera journalist Peter Greste leaves Egypt for Australia.  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut.  Full Article 

Doubles Title

Doubles Title

Hingis wins Australian Open mixed doubles title with Paes.  Full Article 

Houston's Daughter

Houston's Daughter

Bobbi Kristina Brown revived after found unresponsive in tub  Full Article 

Supply Glut

Supply Glut

Sugar mills seek govt help to dispose of supply surplus.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage