Major League Soccer Renews Adidas Deal

Adidas and Major League Soccer have announced that they have extended their partnership by a multi-year period.

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The deal, which was announced just a few days before Major League Soccer kicked off its 28th season, will run until 2030 and is worth $830 million, according to a source involved in the negotiations. Adidas is making the largest investment in North American soccer that it has ever made in its history.

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This contract was signed in 2017 and is set to expire at the end of next year. In terms of North American soccer, it was a record-breaking deal at the time for Adidas and it paved the way for future deals. It was estimated that that deal was worth $700 million.

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Adidas will continue to supply the league with branded apparel, footwear, training gear, and the official match ball in accordance with the terms of the new agreement signed between the two parties.

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“Over a period of time, we have generated sponsorship revenue of nearly a billion dollars, a lot of ticket revenue, a lot of local sponsorship, and we have managed to get the largest company in the world to give us the first global digital partnership – every game on a mobile device,” MLS Commissioner Don Garber told Trade Algo on Wednesday. "So, this is what the pitch deck looks like, and obviously when you get a partnership like this, it takes it to an entirely new level."

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There are also plans for the German sportswear giant to work with Major League Soccer on various initiatives and financial investments in order to expand the sport and the business as well as prepare for the upcoming 2026 World Cup in North America.

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“Taking a look ahead to the 2026 World Cup, we see many opportunities to build on the strong foundation we have already built and the momentum we have already built together. The future of the league is bright, and we are proud to be a part of it," said Rupert Campbell, president of Adidas North America, in an interview with Trade Algo.

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Adidas has had a long relationship with Major League Soccer (MLS) since the league was founded in 1996. Adidas became the official partner of the league eight years later and has continued to be a key part of the league ever since.

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Ups and downs

Adidas has had a tumultuous year, including the turmoil surrounding Ye, formerly known as Kanye West, following his antisemitic remarks made at the end of last year. In the wake of dropping the rapper and fashion mogul, the company expects to lose $1 billion in losses. Bjorn Gulden, who was previously the CEO of Puma, is now heading the brand, and he is also the new leader of the brand.

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An individual familiar with the situation said that these issues had no impact on the negotiations, which took a year to complete. In addition, MLS was assured that Adidas would be able to resolve the issues with Ye as soon as possible, said the person, who declined to be named as they are not authorized to discuss the matter publicly.

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Since the last contract negotiations were completed, Major League Soccer has seen rapid growth in its fan base and financial performance. In 2010, there were 16 teams in the league, and today there are 29 teams in the league. Forbes estimates that the value of the average team has jumped 85% from $579 million in 2019 to $592 million in 2020. With a franchise value of $1 billion, Los Angeles Football Club became the first team in the league's billion-dollar club earlier this month, becoming the first team in the league to reach this level of success. There was an average valuation of $37 million for a club in 2008, according to league statistics.

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It has also been reported that attendance has reached all-time highs. The league saw a record 10 million fans attend a game in 2022, breaking the previous record of 8.6 million that had been set in 2019.

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This has caught the attention of investors. There are a variety of celebrities who own teams in the league, including basketball star James Harden, actors Matthew McConaughey, Will Ferrell, and Reese Witherspoon, musicians Ciara and Macklemore, as well as football stars Russell Wilson and Patrick Mahomes.

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The Major League Soccer League signed a 10-year deal with Apple TV in June which makes it possible to stream every match of the MLS Leagues Cup exclusively through the MLS Season Pass. Garber, who is the league's commissioner, has said that he hopes that this new partnership will allow the league to continue to reach out to a younger demographic as a result of this new partnership. This deal is widely reported to be worth $2.5 billion, with Apple paying MLS $250 million a year as part of the deal.

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Aside from trying to expand their cultural reach, the league and Adidas are also trying to expand their reach globally. The Adidas Nashville SC Johnny Cash jersey was introduced last week as a special edition. During the team's season opener, they will wear the shirt while Johnny Cash music will be blasting from the stadium in support of the team. As June Carter Cash in 2005′s “Walk the Line,” which can be streamed via Apple via iTunes, Witherspoon won an Academy Award for her performance as the minority owner of Nashville.

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MLS season kicks off on Saturday.

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