Court victory for Liverpool in sponsorship deal dispute
The football club was taken to court over its alleged refusal to honour the terms of a reported £40m-a-year deal with US sportswear giant New Balance.
Liverpool FC have won a High Court battle over a multimillion-pound sponsorship deal with American sportswear giant New Balance.
The club was taken to court over its alleged refusal to honour the terms of its reported £40 million-a-year deal with the company, which expires in May 2020.
Under the terms of the deal, New Balance is entitled to renew its sponsorship if it matches the terms of any competitor’s offer to sponsor Liverpool kit.
But the current European champions, who have been offered a £30 million-a-year five-year deal by Nike, argued that New Balance cannot match Nike’s offer in relation to the marketing and distribution of Liverpool products.
The New Balance offer on marketing was less favourable to Liverpool FC than the Nike offer ... It must follow that Liverpool FC is not obliged to enter into a new agreement with New Balance Mr Justice Teare
Giving his ruling in London on Friday, Mr Justice Teare ruled in Liverpool’s favour, finding that “the New Balance offer on marketing was less favourable to Liverpool FC than the Nike offer”.
The judge said Nike’s offer to use “global superstar athletes”, such as tennis player Serena Williams and basketball star Lebron James, to promote Liverpool products could not be matched by New Balance.
“It must follow that Liverpool FC is not obliged to enter into a new agreement with New Balance,” Mr Justice Teare said.
New Balance immediately applied for permission to appeal against the judge’s ruling.
Opening New Balance’s case last week, Daniel Oudkerk QC said the key issue was whether New Balance had matched “the material, measurable and matchable terms of a third-party offer”.
Liverpool argued that New Balance has not matched Nike’s offer, which includes a commitment to sell licensed products in “not less than 6,000 stores worldwide, 500 of which shall be Nike-owned”.
But Mr Oudkerk said New Balance has “approximately 40,000-odd retail doors globally”.
In his written case, Mr Oudkerk argued that Liverpool dismissed New Balance’s offer to match terms as the club was “wedded to Nike”, and that “it appears that the club had resolved to reject the New Balance match come what may”.
Guy Morpuss QC, representing the club, argued that the claim was “really an attempt by New Balance to use a matching clause for a purpose for which it was never intended”.
He said New Balance’s contention that it could distribute Liverpool kit to 40,000 stores was “a myth”, adding that the company had “grossly overstated” the number of stores it could distribute to.
“The idea that New Balance would even get football kit into anything close to those 40,000 stores is utterly fanciful,” Mr Morpuss added.