Just three days before its 28th season starts, the Major League Soccer has extended its partnership with the sportswear giant Adidas by signing a record deal of $830 million. As of today, it’s the largest commitment of the German brand for North American soccer. According to the terms of the contract, the cooperation will run until 2030.
Adidas has been a sponsor of MLS since the league was launched in 1996. Their previous deal, which has to expire next year, was signed in 2017 and cost $700 million. The new agreement says the company will supply MLS with branded apparel and shoes marked with the iconic Three Stripes logo Adidas, training equipment as well as the official MLS ball. Furthermore, Adidas is going to cooperate with the league, investing in the development of the sports business — the initiative seems designed with an eye toward 2026 when the United States, Canada, and Mexico will host the World Cup.
According to MLS Commissar Don Garber, the league is on the upswing now, with a sponsorship income of almost a billion dollars over a period of time. It also has significant revenue from tickets and local sponsorship, while the cooperation with the global brand, which extends even to the digital sphere, is the key to stability. And given modern technological opportunities, one can say that the partnership is entering a new level.
Regardless of the long and stable relationship with MLS, Adidas has experienced rather tough times over the past year. The downfall in the company’s profits in 2022 was caused by a range of factors including the scandal with Kanye West after which Adidas terminated the partnership with the rapper due to his antisemitic remarks as well as unfounded claims to the brand. Expected future losses from such force majeurs are estimated at $1 billion.
At the beginning of 2023, the brand approved a special plan to rectify the miserable situation. Interestingly, the rescue of the company’s business at this new stage is entrusted to Bjorn Gulden who previously headed Puma, the main competitor of Adidas. The rivalry between the companies went down in history, starting with a disagreement between brothers Adolf and Rudolf Dasslers, founders of the two brands – assertive Rudolf even adopted aggressive symbolism for his company, including the famous Puma logo, to spite calm Adolf.
The business issues still didn’t prevent Adidas from continuing its partnership with the MLS. Some sources claim that the parties have been in negotiations for over a year. The representatives of the league are also said to express confidence that the German company will properly settle the differences with Kanye West.
According to experts, the continuations of the Adidas&MLS cooperation usually contribute to the financial growth of both bodies. In the league, the average team value has dramatically grown by 80% to nearly $580 million over the past five years, while the leading position now belongs to Los Angeles FC which reached the value level of $1 billion early this month.
The league’s financial success has attracted many investors, including celebrities. Among the co-owners of the MLS clubs are movie and sports stars, like Reese Witherspoon, Matthew McConaughey, James Harden, and Russel Wilson.
MLS and Adidas also try to cover some cultural points. On the eve of the new season, the sportswear brand thus presented a special Johnny Cash jersey for Nashville SC. The Tennessee team will wear it during the season opener against New York City FC on the 91st birthday of the legendary singer.
