Liverpool FC does not have to continue its multimillion-pound sponsorship deal with New Balance after a judge recognised it could not match Nike’s offer to use “global superstar athletes” to promote its merchandise.
The club won the high court battle with New Balance after the sportswear brand alleged Liverpool had refused to honour the terms of its reported £40m contract 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 merchandise.
But the current European champions, who have been offered a five-year contract of £30m per year by Nike, argued that New Balance could not match its rival’s offer.
Ruling in Liverpool’s favour in London on Friday, Mr Justice Teare said: “The New Balance offer on marketing was less favourable to Liverpool FC than the Nike offer.”
Nike’s offer to use global superstar athletes such as the tennis player Serena Williams and the NBA star LeBron James to promote Liverpool products could not be matched by its rival, Teare found.
“It must follow that Liverpool FC is not obliged to enter into a new agreement with New Balance,” Teare said. New Balance immediately moved to appeal against the ruling.
Opening the case last week for the brand, 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 had 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”.
Oudkerk said New Balance had approximately 40,000 retail doors globally, but the defence claimed it would not be able to distribute Liverpool merchandise to all of those stores.
Oudkerk argued that Liverpool had dismissed New Balance’s offer as the club was “wedded to Nike” and that it appeared 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 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,” Morpuss said.
In a statement after the ruling, a Liverpool spokesman said the club was pleased with the judge’s decision. “We will continue with New Balance for the current season, in combination with preparing next season’s Liverpool kits with our new supplier,” he said.
It is unclear whether New Balance will be granted permission to appeal.
