Thread by @calciocarl, Here’s a thread about the business of football kits. Over the years [...]

Here’s a thread about the business of football kits.

Over the years loads of people have asked me questions about how it works, why clubs &/or brands do specific things. Due to NDA’s I’ll stay away from anything I’ve specifically worked on.

I have got some great shirts tucked away that have been pitched to clubs. There’s some archive inspired Palace ones in there as well

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@KieranMaguire will do a far better job than me of sharing the importance of a kit deal to the P&L of a club......

I will though explore my thoughts on some of the challenges kit suppliers & clubs face with the CV-19 outbreak.

Feel free to ask questions, I’ll do my best to answer as many as I can.

So speak to a club & ask them what they’re looking for in a kit deal and you’ll get a big long list
- guaranteed big cheque up front.
- revenue from kit sales
- royalties
- bespoke kit
- on trend brand
- excellent & tailored training wear
- quick supply
And there are a lot more.

Some clubs want the kit manufacturer to manage the club shop & online store so they can keep their costs down, some clubs want the stock on consignment ie they only pay for it when they sell it. At the heart of most of this is money. It’s a revenue stream.

Ask fans & what you typically get is, we want Nike, we want Adidas, we want cool kits & are unique to our club. The challenge though is, Nike & Adidas are only interested in the clubs that grow their brand all around the world.

For both, they’re happy to pay incredible sums to secure the worlds biggest clubs which creates awareness & drives sales of the brand across all other categories but it is targeted with their brand plan. Nike do this best & less is often more.

Their strategy is to win in key cities around the world. London, Paris, Rome being 3 of them. Nike targeted Chelsea & Spurs, it targeted PSG & it targeted Roma. With all of them it forms part of their overall marketing strategy.

They are comfortable in the overall kit deal being loss making as it forms part of their global marketing strategy. It’s not the number of clubs they have but the quality that matters to them. They don’t care about Stoke, Southampton or Palace come to that matter!

Lesser clubs will often approach Nike or Adidas & fans may well think they have a kit deal with them ie Palace with Nike from 09-11, it is actually a deal with a third party in this instance Avec who sell the club a template kit.

So with Nike & Adidas only interested in the biggest clubs it leaves plenty of space for other brands & a little like fashion labels they come & go. Puma & to a certain extent Umbro have remained a consistent but Hummel, Errea, Joma, Macron, Kappa & Diadora have spells

where they have a significant number of clubs & then go. Why does this happen? In the UK, for a kit manufacturer it is incredibly difficult to make money. Put simply, all the brands get excited about being in the Premier League, they invest heavily to secure clubs they

spend 3-4 years trying to commercialise it, the brand awareness goes up but the sales line doesn’t reflect the overall costs & they lose money. They then retreat. Even some of the bigger global brands such as New Balance & UnderArmour haven’t been able to make the maths work.

Remember when Liverpool went with Warrior Sports? Warrior wanted Liverpool as it would create greater awareness for them globally & help them sell more off field goods away from hockey especially in the US. It failed, they’re sales barely increased & the deal was loss making

The parent company quickly switched it from Warrior to New Balance to give themselves a chance of commercialising it.

If kit manufactures aren’t making money then who is? Not surprisingly it’s not factories but what may well surprise you, it’s not your high street retailers.

It’s not unheard of for one of the big chains to lose money in a year in their football shirts category. The one thing you can guarantee about kit retailing, you’ve either got too many or you’ve sold out. The lead times mean once you’ve sold out that’s it for the season.

And guess what? Us football fans are fickle, if our team does well we’re buy it, if they’re having a poor season or tournament then we won’t. So a retailer may make money on 1 or 2 teams but lose on the others when it has to discount heavily to sell them.

My favourite example of this is from the last World Cup. I was with the biggest shirt retailer in Munich who had bought 19k Germany shirts, he was worried before the tournament that he’d sell out too early but didn’t want to have any left over as Germany will......

Probably win the tournament & people will wait to buy the shirt with the extra star. He’d sold 5k in the week up to Germany’s first game, by the time they crash out he’d sold 102 more! No fan want a shirt associated with failure however nice it is.

So in answer to the question, it’s the clubs that make the money.....which quickly gets swallowed up by wages. What selling football kits also do for clubs is provide cash flow at important times of the season. Shirt sales typically start as the season finishes

and it ensures clubs have an income stream when they’re not playing. Many clubs choose to only sell their shirts in their own club shops & online, it means they capture more of the cash & also means they’re not being undercut by somebody who is cheaper.

For fans, a football kit is an emotional attachment to the club they support. It’s something we wear with pride, showing off our colours. It’s what we stand for. For many clubs (not Palace) it’s purely a form of cash & profit into a business.

More to follow later.

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