LIVERPOOL, ENGLAND - Saturday, November 30, 2019: Liverpool's Virgil van Dijk celebrates scoring the second goal, his second of the game, during the FA Premier League match between Liverpool FC and Brighton & Hove Albion FC at Anfield. (Pic by David Rawcliffe/Propaganda)

Liverpool pay Nike “significant compensation” to lift the title wearing New Balance

Liverpool have agreed a “significant” settlement with new kit manufacturer Nike to finish the season wearing their current New Balance kits, as an “ethical obligation.”

The Reds were due to begin their deal with Nike on June 1, but with the season spilling over into the summer it was deemed proper to finish the campaign with New Balance.

It had already been reported that Liverpool would wear their existing kits for the remainder of the campaign, with the blessing of Nike, but there were understandable issues with their contract with the American supplier.

The Mail report that “complex negotiations” between all three parties began in March, when the Premier League was initially suspended.

And with Liverpool having “always intended to honour what they consider an ethical obligation” to New Balance, Nike “have agreed to put back the activation date until the start of the 2020/21.”

However, this is “in return for significant compensation,” which could feasibly reach into the millions given the new deal is worth £30 million a year.

With a typical kit-deal year stretching from the start of June to the end of May, and next season not expected to start until at least September, Nike’s loss could be worth a minimum of £7.5 million.

That is not factoring in the revenue of sales—which also impacts Liverpool, given the deal is highly incentivised—and the exposure from images of the club winning its first Premier League title wearing the kit.

LIVERPOOL, ENGLAND - Sunday, December 29, 2019: Liverpool's shirt featuring the gold FIFA Club World Cup winners' badge during the FA Premier League match between Liverpool FC and Wolverhampton Wanderers FC at Anfield. (Pic by Richard Roberts/Propaganda)

New Balance see this as a “major marketing opportunity,” and therefore this is a big boost to the Reds’ current supplier.

Liverpool’s settlement with Nike is another financial setback in an increasingly difficult period, however, with their main revenue streams halted indefinitely as fixtures are postponed and will be played behind closed doors when they resume.

Whether this impacts other areas such as transfers and contract negotiations is unclear, but it is unlikely to help, with the club already expected to oversee a quiet summer of signings.

Speculation over a big-money deal for Timo Werner has been clouded by this reality, and what is effectively another ‘loss’ of capital could affect this further.

There is the prospect, however, that New Balance will be due to pay Liverpool a sizeable bonus for winning the title.

It should be mentioned, also, that the Mail‘s report includes a glaring error as it repeatedly claims Liverpool’s deal with Nike is worth £70 million a year, which is simply a projection based on potential sales.

Whether this calls the veracity of the settlement claims into question is unlikely, but it is certainly an oversight.