Chelsea Seeks Uniform Supplier, Sponsor After Ditching Umbro

January 2005 - Bloomberg

Chelsea, English soccer's Premiership leader, said it will pay 24.5 million pounds ($45.7 million) to end an 11-year association with uniform supplier Umbro Plc, less than four months after it lost its shirt sponsor to rival Arsenal.

The Umbro deal, first signed in 1995 and renewed in 2001, will expire five years early in June 2006, London-based Chelsea said in a statement on its Web site today. In September, the club said it was seeking a consumer brand to sponsor its shirts from next season after Emirates Airlines chose to back Arsenal.

"Chelsea are being very clever,'' Ceri Glen, an account director at London-based sponsorship consultant Redmandarin Ltd., said in an interview. "If they achieve the success and dominance that's predicted for them their fan base will go up, so they are going to negotiate the most lucrative shirt deals possible.''

Arsenal and Manchester United, the Premiership's most successful teams, both have their uniforms made by Nike Inc., the world's biggest maker of sports apparel. Nike paid United 300 million pounds in November 2000 in a 13-year deal negotiated by Peter Kenyon, who left Manchester to become Chelsea chief executive in 2003.

"I wouldn't be surprised if Nike wants Chelsea because they like to be associated with the best,'' Glen said. "It's a question of how much they are willing to stump up.''

Premiership champion Arsenal said last year it expected to extend its accord with Nike for three years beyond 2011, valuing the 10-year association at 130 million pounds. Adidas-Salomon AG, the world's second-largest sporting-goods maker, supplies kit to teams including Newcastle United, Real Madrid, Bayern Munich and AC Milan. `Top Club'

"We always look at potential opportunities when they come up,'' London-based Nike spokesman Simon Charlesworth said in a phone interview. "Chelsea are a top club, and we always look at top clubs.'' He declined to say whether Nike is in talks with Chelsea.

Russian oil billionaire Roman Abramovich has spent more than 210 million pounds on players in the 19 months since he bought Chelsea, which won its only English soccer championship in 1995. The club, spurred by stars including England's Frank Lampard and France's Claude Makelele, is 10 points clear of second-placed Arsenal 23 games into the 38-match season.

Kenyon, who was chief operating officer at Umbro until 1997 before joining United, said in the statement that a new kit supplier would help Chelsea achieve its ``strategic long-term'' targets.

Emirates Defection Chelsea's five-year accord with Dubai, United Arab Emirates- based Emirates, the biggest Arab carrier, terminates at the end of the season. The club said it would seek a sponsor with businesses in the U.K., North America and Asia, where it's seeking to increase sales of merchandise.

Emirates will pay Arsenal 100 million pounds over 15 years for the naming rights to the 60,000-seat arena the club is building in north London. Emirates will also have its name on Arsenal's jerseys for eight years from 2006.

Vodafone Group Plc, the world's biggest mobile-phone company, and U.K. rival MMO2 Plc currently sponsor the shirts of United and Arsenal respectively, while Siemens AG, the world's fourth-largest mobile-phone maker, has its name on Real Madrid's shirts. T-Mobile International AG, Germany's biggest cellular operator, backs Bayern Munich.