- Sneaker maker ups profit forecast on compensation payment
- Chelsea coming off its worst Premier League season in years
Adidas AG will get a payoff of at least 50 million euros ($57 million) from London’s Chelsea soccer team to end a sponsorship deal six years early, leading the German company to boost its profit forecast.
The decision was reached by mutual agreement, and the partnership will now finish on June 30, 2017, the sportswear maker said in a statement Wednesday after markets closed. The partnership began in 2006 and was renewed for 10 years in 2013. Once the alliance ends, Chelsea will seek a new equipment sponsor, Adidas said in a separate statement.
The abrupt termination comes months before Kasper Rorsted is due to join and succeed Adidas’s long-serving chief executive officer Herbert Hainer. Adidas said the move illustrates its strategy of partnering with fewer sports teams. Chelsea, owned by Russian billionaire Roman Abramovich, is coming off its most difficult season in years, having failed to qualify for European competitions next term.
Adidas will book a gain in its second-quarter results for the payment, which will be in the “mid-double-digit million-euro range.” Full-year net income from continuing operations will now increase by 25 percent to about 900 million euros, the company said, having previously forecast profit of 830 million euros to 850 million euros.