MLS, Adidas agree to eight-year sponsorship deal

(si.com 8-30-10)

Major League Soccer and Adidas have agreed to a new eight-year sponsorship deal that officials believe solidify and validate the increased growth of the league and calls for significant investment in youth development.

The new deal replaces a 10-year, $150 million contract between the two organizations that started with the 2005 season. The new agreement will begin with the 2011 season and continue through 2018 -- when the league will be in its 22nd season.

The previous deal came before MLS added successful expansion franchises, increased player salaries and committed to deepening the talent pool with the option for teams to add multiple designated players. All those factors, plus record interest in the United States surrounding the World Cup earlier this summer prompted Adidas to approach MLS with a new deal.

"Both of us are feeling really good about the partnership we have had since the start of the MLS and the first deal that we did. ... We both felt this was the time to talk this deal out for a longer time frame and for spending the money on the youth development of the game in the U.S," Adidas America president Patrik Nilsson said.

A person with knowledge of the new deal said it's worth more than $200 million. The person spoke on the condition of anonymity because financial terms were not disclosed by the league or Adidas.

"That's a great statement about the league that this company, very well respected football soccer company that has a very distinct and clear vision for the sport in North America and sees MLS as the cornerstone for that vision," MLS commissioner Don Garber said. "That's an important thing for us."

Adidas has served as one of MLS' partners since the league's inception in 1996. When the current deal started with the 2005 season, Adidas took over as the official athletic sponsor and licensed product supplier for the league. Adidas also purchased advertising rights.

The new deal continues much of the previous agreement, but makes a significant investment in youth development and reserve programs tied to all 16 - soon to be 18 starting next season - MLS franchises.

How that investment is executed is still to be determined.

"The goal will be to make a very direct link between our academies, our reserve league, our youth programs with a lot of the other youth programs going on in this country," Garber said. "Adidas can play a very important role in creating that bridge and solidifying all those ties."

There also will be additional commitment by Adidas in marketing support -- including additional retail marketing to increase player exposure - and with various media platforms.

The idea for broaching a new deal with four years remaining on the current sponsorship deal came from Adidas. Nilsson said he sees a bridge missing between the high school level and professional level and hopes the money included in this new deal will help strengthen that link.

"I think that is one area where we need to do more and MLS has acknowledged that," Nilsson said. "That is one of the key reasons why we decided to change this deal now and be able to invest stronger toward investing in that direction."