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Is the Nike deal best for Celtic?

Date: 15th May 2012 at 7:59 am
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Nike Celtic newsThe season is over and from comments Neil Lennon has made we are already approaching targets for next season. I have been talking with a few fellow supporters about ways Celtic could make more money without fleecing us. Someone asked “Why do we need Nike?” Good question.

Right now our deal with Nike is £25 million over 5 years. £5 million a year is decent sum and more than we will make for winning the SPL. Not too shabby for doing little to nothing at all. Nike make the shirts and do most of the shipping. We sell them at the Celtic Superstores and online at celticfc.co.uk.

I am certain Nike are making money on this deal. In my research it appears that we sell about 350,000 shirts per year. At £40 a pop that works out to be £14 million a year. My research also reveals that the cost of actually making the shirt itself is about £2-4.

Let’s make round that up to a nice even £5, that is £1.75 million out of the £14 million. How much goes to shipping and marketing I don’t know but I would think Nike are profiting about £4-5 million each year.

How about this scenario then? We approach a company with a pay per shirt deal. We buy 300k shirts for £3m, that is £10 per shirt netting what ever company we use £1.5m.

Say Celtic are good to us and knock 20% off regular price and sell them online and in Celtic superstores for £32 per shirt. That is £6.6 million in profit per year for less shirt sales and less outlay for the fans.

I would imagine at £32 per shirt sale and knowing that you are helping the club we might even push 400k in sales. That would be a nice earner £8.8 million for the club per year. Or we could kept it at £40 and if we sold the average we would clear £10 million and double our current deal.

Now there are a lot of numbers there and probably some variables that I have not considered, if so enlighten me, but why should Nike profit from us the fans when we could directly help our team by doing what we do anyway? We already have the Superstores in place and with online sales and actually believe this is viable. What do you think?

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