Jan. 27 (Bloomberg) -- Puma SE replaced Nike Inc. as Arsenal soccer club’s jersey supplier in a multiyear agreement that the English Premier League team says is the largest commercial agreement in its 127-year history.
The pact is worth 150 million pounds ($249 million) over five years with an additional £4 million pounds annually in “possible add-ons,” according to London’s Daily Telegraph. That tops Manchester United’s 25 million-pound annual deal with Nike and Liverpool’s contract with Warrior Sports for a similar amount.
“This is a very important step in terms of our progression on the pitch,” Ivan Gazidis, Arsenal’s chief executive officer, said at a news conference at the club’s Emirates Stadium today. “As we look from this summer onwards the money will be available to the manager to use in the way that he thinks best.”
Arsenal and Puma wouldn’t give financial terms of the contract, saying it “represents the biggest deal in each organization’s history.”
Arsenal, led by coach Arsene Wenger, is trying to match Manchester United, Chelsea and Manchester City, clubs that have been rewarded with on-field success as they have spent more on players. Arsenal hasn’t won a trophy since 2005.
In September the north London team broke its own transfer record with the reported 42.4 million-pound signing of midfielder Mesut Ozil from Real Madrid. The London side is leading England’s 20-team Premier League with less than half a season remaining.
In 2012 Arsenal signed a 150 million-pound agreement with Emirates NBD PJSC to extend the Gulf airline’s sponsorship of the club’s shirts and stadium. Its shirt deal with Oregon-based Nike was worth 8 million pounds a year. Puma takes over on July 1, the club said in a statement handed out at the news conference.
Arsenal had 280 million pounds in revenue in the 12 months ended May 31, making it eighth on Deloitte LP’s list of the richest soccer clubs. Deloitte said the team earned 62 million pounds in commercial income last season. That figure, which excludes broadcast income, puts it behind 11 other clubs including Germany’s Schalke.
Herzogenaurach, Germany-based Puma has been undertaking restructuring measures since 2009 -- closing stores, eliminating jobs and cutting product ranges to combat declining footwear sales, while seeking to boost its performance-wear credentials.
The company, known for its leaping cat logo, sponsors Jamaica’s Usain Bolt, the world’s fastest sprinter, and other soccer teams like Borussia Dortmund and the Italian national team.
“I don’t think we can find a better partner than Arsenal,” Bjorn Gulden, Puma’s CEO, said at today’s news conference. “They stand for everything that Puma wants to stand for. Excitement. Speed. Global.
‘‘Arsenal will help us gain credibility as a performance sports brand,’’ he said.
Puma is 83 percent-owned by Kering SA, the owner of Gucci. Arsenal’s majority shareholder is American billionaire Stan Kroenke, who also owns the National Football League’s St. Louis Rams.
To contact the reporter on this story: Ben Priechenfried in London at email@example.com
To contact the editor responsible for this story: Christopher Elser at firstname.lastname@example.org