Celtic’s deal with Adidas is the biggest in the club’s history.
67 Hail Hail told last week how Celtic announced the record Adidas deal just less than 24 hours before the new Hoops home kit was leaked online.
Since then there has been scrutiny poured onto the deal with reports suggesting the 10-year Adidas contract is worth over £30m to Celtic.
However, to get more detail on the new deal and what it means for Celtic, 67 Hail Hail contacted TBR Football’s Head of Football Finance and Governance, Adam Williams to get a more in-depth look at what the numbers behind the contract really mean.
Photo by Visionhaus/Getty ImagesNew deal shows ‘A-list’ Celtic are ‘highly regarded’ by Adidas
Celtic’s financial position in Scotland is helped with having a kit deal with the giant German kit wear supplier.
But to look closer at the detail, Williams has told 67 Hail Hail that a ‘greater cut of merchandise sales’ could see a ‘final value increase’ of the original £30m figures being banded about.
Williams told 67 Hail Hail, “Adidas have made a habit of locking in their A-list clubs to ultra-long deals, so I think the fact that it will reportedly be a 10-year extension speaks to how highly regarded Celtic are as a commercial partner.
“The figures quoted seem a little modest on first inspection. £30m for a 10-year deal is a little lower on an annualised basis than the previous agreement, which was said to be £5m-a-year. But I’m assuming the figures briefed to the media will be just the basic pay and then Celtic will get a greater cut of merchandise sales that will see the final value increase.
“They made over £18m in merchandise sales in the last financial year, and a fair chunk of that will come from the Adidas deal. We don’t know the cut they receive from sales – often, it’s around 10 per cent but it can vary depending on the base rate.
“Sometimes the base rate can also be lower if the club has retained some of the store and licensing rights, which they think they can earn more from as opposed to just handing them over to Adidas.”
Celtic’s ‘huge commercial advantage’ amid San Francisco 49ers’ Rangers takeover
Now with the latest rumours of the San Francisco 49ers consortium ‘takeover’ of Rangers doing the rounds, Williams believes the deal could help ‘fortify’ Celtic’s position should any new investment at Ibrox threaten their domination of Scottish football.
Williams continued, “But having £30m of guaranteed revenue over the next 10 years is significant for Celtic.
“It’s part of a wider picture that gives them the security to set budgets two or three seasons in advance and then scale those up and down based on sporting performance.
“They have this huge commercial advantage over Rangers but they absolutely can’t afford to stand still at this moment given the imminent takeover. The 49ers are experts in commercialisation and Celtic need to fortify their position.”
Celtic are currently Scotland’s richest club and due to their hard work in building up the club’s finances over the last two decades, the club can invest huge amounts of money into the first-team if needed.
Should the 49ers takeover of Rangers go ahead, it appears the Adidas deal stands Celtic in good stead which could help stave off any challenge the Ibrox club may pose should the American consortium invest some cash into the Rangers first team as per UEFA’s FFP rules.