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Is the Nike deal best for Celtic?

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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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  • Joe McHugh says:

    Some interesting figures Paul.

    What can’t be calculated is the prestige of being in the Nike stable with some of the worlds top clubs.

    Celtic shirts are on display worldwide alongside Barcelona and others and the value of that is hard to judge.

    In South Korea for example they have access to Celtic shirts in sports stores, without Nike would-be fans have to go online to purchase which is less likely and less impulsive.

    Maybe for lower division English sides DIY kit deals could prove good value but having the design and marketing teams of Nike working for Celtic I think swings things in their favour.

  • williebhoy says:

    Personally speaking I don’t like a lot of Nike products so don’t buy them. We should definitely be making more use of our brand name, Nike are not the only show in town – Adidas are just as well known if not more so.

    Whoever is in the design team at Nike, needs sacked some of the truly awful shirt designs are pitiful must be YTS designers or colour blind.

    It’s not just shirt sales, but the casual range, track suits etc. Compare our sales to such as Arsenal and the profits they make – I doubt the numbers stack up evenly. Time we took a much harder stance to push up our percentage of profits.

    • KevinBarry says:

      It would be interesting to see Adidas version of the hoops with 3 white stripes down the arms.

  • Mike Mullen says:

    I think Nike is a good deal, and I would stay with them for the a few more years yet. I would rather see us get rid of Tennents, why should we share the same sponsor as the cheats on the other side of the city.

  • Gary Morrison says:

    Did Administrangers not try a similar thing with Diadora a while back. I distinctly remember that falling flat on its face.

    Nike are a famous, prestigious, and worldwide brand with good trade links in all countries. Nike help the Celtic brand just as much as Celtic help the Nike brand.

  • rbizzo says:

    i agree with Joe, nothing is better for global awareness than walking into a Nike store and seeing the hoops. I have foreign friends who have bought Celtic tops because the were available – they wouldn’t have done so if they had to order.

    I’m always proud to walk into Nike concessions in Macy’s etc in New York and see Celtic tops beside Barca and Man Utd. I also think the Nike merchandise is better quality and looks nicer also.

  • Dunc says:

    the nike deal is good for the profile of celtic worldwide. As has been mentioned above, celtic shirts are proudly on display in nike stores and the likes of the nou camp club store..

    Rangers did have their own merchandising thing going on a few years back, and it was very successful. I think they made the strips then diadora paid them money to put their name on them. Minty sold all that off to jjb for 10 years for money up front to pay off some debts surprisingly..

  • CROM says:

    I agree with most of the previous responses. Nike are a global brand who help promote Celtic worldwide, as well provide top quality product. of course they are making a profit, we should hope they do!

    If other global companies see that Nike can make a good profit by investing in us (especially when not investing in rangers) then hopefully the club attract more business, better sponsors, more investment and move away from “old firm” deals.

  • Celtic Daft says:

    I feel Nike use smaller leagues, like SPL, Belgium, Sweden to try out their more unusual designs, to test fans reaction/sales £££. The current Celtic away kit isn’t very attractive & nothing to do with the Celtic tradition. The grey body armour with green arms, like something out of Rollerball.

    This kit stuck out to me, from Nike 2010/2011. I’d have loved to have seen it in lime green with black edging on sleeve/neck & black pin-stripes. Would have been like the Away kit from 1986…

    http://www.epltalk.com/media/2010/06/arsenal-new-away-jersey1.jpg

  • Vincent says:

    I was looking at comments by rangers supporters a few weeks ago and one of them (who lives in US) was whining that rangers tops aren’t in the sports stores, but that celtic tops are everywhere because we’re with Nike – so Nike provides good distribution and gives Celtic more exposure around the world.

  • Andy McBride says:

    I travel a lot and it fills me with pride when I am at an airport and I see the Celtic jersey alongside, Barcelona, Inter Milan, Man Utd, Arsenal… just because of Nike.

    • jocky bhoy says:

      Absolutely Andy – me too. From Singapore to Chicago I have walked into shops and seen Celtic gear. If we want to be a big team with a big brand, we need big partners.

      The deal I want to get rid of is the joint shirt sponsorship. I don’t blame Celtic for it, its primarily the result of an ill-conceived bhoycott of McEwan’s back in the early days of shirt sponsors, no-one wants to offend half of Glasgow/Scotland. But when (not if) the Evil Empire falls, we don’t need to look for a company with deep enough pockets for both sides of the divide, rather we can look for a company to sponsor us and us alone. That might get us a mill or two extra.

  • The Hurricane says:

    The Nike Brand is every teams dream shirt sponser,WHY should we want to change A Guaranteed £5million, especially for a Scottish side! I think we are lucky to be still involved with Nike,with our European ventures not being to clever! Hope that changes next season.HAIL! HAIL!

  • Laydo says:

    Why would we want to take the gamble. Celtic are a football club and being responsible for an infrastructure of manufacturing and shipping opens you up to a number of logistical and legal issues and potential PR disaster.

    As a few previous posts have said we are in the elite of sport such as Barca, Juve and Man utd. Brand awareness is key and Nike opens us up to market that a self-made kit wouldn’t. How many of the replica shirts sold where sold because of Nike association?

  • Jim Lister says:

    Bin Nike – they are infamous exploiters of sweated and child labour, we are rightly proud to support inititiatives like the Thai Tims. We should be working with a fair trade producer and ensuring those communities benefit from a fair trade premium – sales would rocket.
    Don’t buy Nike!

  • Jinky67 says:

    The design and quality of Nike football shirts are awful.

    I have home shirts from the 80s which are still in great condition but on the Nike top 2011-2012, the current home top, the colours were running after a few washes.

    Some of the mock ups doing the rounds for the new home top for next season were far better than the one Nike brought out. Their away strips for us have been boring and/or ridiculous(barcode strip?! Really?)

    Ditch them and get Adidas or Umbro, or anyone else for that matter, on board.

    Not sure if your idea is a goer but if so I suspect it’d have been done by now- the huns JJB deal doesn’t seem to have done much for them!

  • Paul Jarvis says:

    I was in Mexico for my honeymoon a couple of years ago and found the Bumblebee kit while out on a shopping trip.

    We truly are a global brand, and we wont get that kind of marketing with an “in-house” branded kit

  • Mike Bhoyle says:

    Agree with the Hurricane…
    Leave well alone…

  • PB says:

    Nike has the best distribution in the world.
    Who is going to handle that for another supplier? Also if you want to look at Umbro, they are owned by Nike as well.

    Adidas makes a fine product too but Nike eclipses them in terms of an entire line of of team training gear and fan apparal.

    Going Adidas would limit Celtic exposure in the states. They would be available of course, just not in as many outlets. The only real national carrier of soccer shirts in the US is Dick’s Sporting Goods. They carry more Adidas but that is only because the MLS has an exclusive deal with Adidas.

    Adidas has come on with some more technological advances (for them)but only because Nike pushes them there.

    As for the designs, how many away designs can you do when you limit your color palate to Green, Black, Gold, White?

    You are not going to get 350,000 ordering from the Celtic Super Store (Internet sales are disbursed through Kitbag in Manchester).

    I think Nike does a terrific job of branding Celtic. Remember, the team has a responsibility to help brand itself by winning the league and getting to the group stages in Europe. The more you win, the more shirts and gear you sell.

    With the poor TV deal that the SPL has in terms of cash to the clubs, Nike has been a God send to Celtic

  • BeijingBhoy says:

    I prefer adidas to nike as it is European and not American p@sh. And nike in big in totally shite american sports like basketball (yawn). But, Adidas as Kevin Barry says might no work with the 3 stripes and the hoops. I’ve never seen a hooped top made by adidas. So far i think Nike has only made one really cool home top for Celtic and that was the lisbon 67 40year anniversary. The new home top for next season looks a wee bit pyjama esque. The new away top however is sweeeet. Just hoping it does have the green white and gold on the cuffs.

    Although I prefer Adidas to Nike I do agree with the sentiments regarding the international branding. Celtic do benefit from the fact that Celtic tops will be in Nike stores all over the world. I remember being on holiday in Barcelona 1997 or 98. and after the tour of Camp Nou being in the Barca Nike store. The hun strip was made by Nike at the time. There was an Asian gentleman looking at the manky hun garment, so i quickly went over to him and told him it was out of date (it wasn’t) and that the Brazil top (that he has in his other hand) was a far better purchase. He thanked me and went off to buy the Brazil top. Yes mission accomplished, one less hun top bought in the world. I put all the other hun tops under arsenal, man u and Portugal jerseys, so noone would see them. haha.

    Hail Hail.

  • Paul Morgan says:

    Good points and a good read. Not a little counter on some of those points.

    1) Loss of impulse buys and foreign sales.
    I live in the US and have a mate that works in a local sports store. He said that nearly every Celtic top he has sold is to someone from our CSC or an ex-pat. I don’t think there are many impulse buys. If I want a Celtic top I make the decision before I even leave my home. How many times have has someone said? “Green and White hoops, they look cool, I want this.” I would imagine that young Americans walking into a Nike store don’t even know who we are, which brings me to….

    2) Global Brand Recognition
    Were as it is cool to be displayed with the Barcelona’s and the Man Utd’s, I don’t think it helps our sales. The best way to get global brand recognition is results on the park and a good run in the Champions League. I’m sure Celtic shirt sales in Africa are fairly low but you get a Quarter Final place in the Champions League and people will know who the hoops are there. For this though we need…….

    3) Money
    If we can make anymore money from anything at all we should look at it. The figures up top are for shirt sales alone, not including tracksuits, training tops, shorts, socks etc. But the 5 million from Nike stays the same. We don’t necessarily need to drop Nike, just renegotiate to a per shirt deal. They can make whatever off the rest of the merchandise if we get 25 per shirt guaranteed. That is about 8.25 million per year and I know I would buy a top every year knowing how much I would be helping my team.

    And if you think we should be lucky to have Nike, look at this list
    http://www.sportingintelligence.com/2010/08/31/revealed-the-worlds-best-selling-club-football-shirts-310802/
    We are just outside Nike’s top 5 list. Do you really think a big business like that would let us walk away? No, they are all about the money and if making profit is all they care about.

    • joeblow says:

      best post,i think esp in these hard times the nike deal was a wonderfull business deal,lawell didnt get the credit he deserves,but saying that i think we could renogotiate with nike at the end of the deal-hopefully they will still want in and i dont see them not wanting too-they could double the money and still make a lot of money,only thing i dont agree is about impulse buys,ive bought football shirts of teams i dont support because it has been a good shirt,and i think the hoops are cool and with guys like snoop dog talking of us,they will get cooler and therefore sell more,as for workers conditions,do you honestly think adidas or anyone else is any different-its how the world works unfortunately

  • Steven Kelly says:

    The real problem with Nike is that they have a really, really bad human rights record and I for one refuse to wear any Nike products because of this.They are a scumbag company with awful business practices.

    Do some research and see how they use child labour in large factories in China and elsewhere, for pennies per week never mind per day.

    I realise Adidas and Umbro might not be a helluva ot better, but they are better; in business practice and in shirt design.

    I think Nike as a company sucks and if we as a clun wish to be true to core and support poor folks and charities, we need to look at our own shirt suppliers and question ourselves.

    Peace and Hail Hail, Steven Kelly

    • joeblow says:

      as i said above dont think nike are the only ones with workers problems,adidas etc are just as bad,sadly its how the world works HH

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