Manchester United’s season goes from bad to outright embarrassing as each week passes, and a new report suggests that their massive apparel deal with Adidas is under threat due to their on-field failures.
According to The Telegraph, Adidas holds the right to terminate the deal with a one-year notice period should the Red Devils face relegation to the Championship.
United’s Form Sparks Concerns Over Lucrative Partnership
Manchester United’s long-standing relationship with German sportswear giant Adidas is under serious threat as their poor form continues to raise relegation fears.
Adidas first supplied Manchester United’s apparel in 1980 to 1992 before reuniting with the clu in 2015 following a 23-year gap.
The two parties recently inked a lucrative 10-year extension in June 2023, worth $1.8 billion AUD (£900 million). However, United’s current Premier League struggles could jeopardise this deal.
Premier League Woes Could Prove Costly
Sitting in 13th place, Manchester United are only seven points above the relegation zone, with Ipswich Town breathing down their neck.
It comes after the club had the least amount of points after the halfway mark to a Premier League season in the club’s history (22 pts), a record they seemingly find themselves breaking every year.
In the unlikely event that relegation does happen, the financial blows would be critical for the club.
Adidas’ Relegation Clause Explained
Adidas reportedly has a clause in the contract that allows them to reduce payments by 50% if Manchester United are not in the Premier League. Moreover, the club stands to lose an additional $20 million AUD (£10 million) annually if they fail to qualify for the Champions League.
If United were relegated, their payout could shrink to a mere $70 million (£35 million) next season—a massive drop from the initial agreement.
Relegation Battle Heats Up
United manager Ruben Amorim has acknowledged the reality of the relegation battle his side faces.
Even if the concept of a Red Devils relegation seems impossible, the mere discussion of it is an indictment on the club.
Conclusion
If Manchester United’s downward spiral continues, the club not only risks relegation but could face severe financial consequences.
Their lack of Champions League football and a potential season without European football as a whole would mark a historic low point for the club and bring significant commercial repercussions.
