Chelsea FC, last season’s English Premier League champion, will cancel its sponsorship deal with Adidas at the end next season, ending a 10-year partnership with the German sportswear company. In a statement yesterday (May 11), the club thanked Adidas for its “fantastic support and cooperation,” a particularly successful time for the club—over that period it won 10 trophies, including the Champions League and two Premier League titles.
The £300 million ($433 million) sponsorship deal was supposed to run through 2023. Adidas says it will receive an unspecified payment from Chelsea to terminate the contract early, which will boost the company’s profits in the current quarter.
By taking a financial hit to quit the deal, Chelsea is hoping to make up for it with an even more lucrative arrangement with a different brand. The five-time champions will not be short of options. Nike, the world’s biggest sportswear company, is an obvious alternative. Under Armour, which has been making big inroads in the US, is also aggressively chasing growth outside of its home market. Last month, Under Armour announced a seven-year sponsorship agreement with Premier League side Southampton. It also has an existing contract with London-based Tottenham Hotspurs.
When it was first announced, Chelsea’s deal with Adidas was the priciest in English soccer; it has since slipped behind Manchester United’s £75 million per year deal, also with Adidas. The German group currently features in six of soccer’s 10 biggest kit sponsorship deals. Losing Chelsea may hurt the sportswear brand’s visibility a bit, but given the early-cancellation fee and Chelsea’s drastic dip in form—it’s set for a ninth-place finish this season—the timing may not be so bad after all.