I don't the details of the Nike-Man Utd deal, but the way these deals for "massive" clubs are usually structured is that the manufacturer guarantees the club a fixed annual royalty payment over the term of the contract, with the amount of that royalty being subject to increase in the event certain sales targets are hit and/or certain bonuses are triggered for titles and the like. Some contracts have downward adjustment clauses for failure to hit targets, relegation, etc., and there are also contracts that allow the manufacturer to terminate in such instances and/or at specified intervals (I remember reading that Nike had such an out with United at the beginning of this season).
There does, however, seem to be some confusion over who owns Manchester United Merchandising. The FT says that it is wholly owned by the plc, and it would have to be controlled for the revenues to be included in the plc's consolidated accounts, but a good deal of the fan commentary seems to believe that it belongs to Nike. I know who I trust more in such debate, but I wonder where the confusion has arisen.
Posts: 18670 | From: mediolanum | Registered: Jan 2006
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