Don't miss the big Liverpool FC stories by getting our newsletter Sign me up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

A fascinating clash between corporate giants is underway at the High Court in London - as New Balance desperately try to cling on to their kit deal with Liverpool.

The American firm has produced the two best-selling playing kits in Liverpool's history, with commercial success fuelled by the Red's stunning achievements on the pitch and the feel-good factor under Jurgen Klopp.

But with the club keen to make the most of their huge marketability, global mega-brand Nike has stepped in and appears to have successfully wooed Liverpool officials with a £30million per year offer.

New Balance claim it can match Nike's offer and say a clause in the existing contract, which is up in May, means it should be renewed.

Talks between the parties have failed and now it is up to the Commercial Court in London, a division of the High Court, to rule on what happens next.

Drake, LeBron James and Serena Williams

According to legal papers filed to the court and obtained by the ECHO, the battle does not revolve around the simple issue of who can stump up the most cash up-front.

Nike's offer of £30million as an "annual rights fee" is relatively modest - compared with the £71million deal the firm has with Paris Saint Germain - and is in fact significantly less than the £45million fee agreed with New Balance under the current deal.

The allure of Nike's offer comes from its enormous distribution network - and the promise of a 20% royalty on net sales of LFC products around the globe.

Rap superstar Drake, basketball icon LeBron James - who is a minor shareholder in Liverpool - and tennis legend Serena Williams are all name-checked by Nike and Liverpool FC to highlight the weapons in Nike's marketing arsenal.

The court documents state Nike has offered: "To market LFC and/or Licensed Products through marketing initiatives featuring not less than three non-football global superstar athletes and influencers of the caliber of Lebron James, Serena Williams, Drake etc, with such initiatives being used to market certain Licensed Products produced for the start of season 2020/21."

The company has also offered to market Liverpool FC "in a manner that is consistent with Nike’s other top tier UK football clubs e.g. Tottenham and Chelsea."

'Super-charged' distribution

One of the main issues of contention is the promise of 'global doors' - ie the number of shops or retail outlets that each company can sell Liverpool products in.

According to papers filed by the club's legal team, New Balance had promised in 2011 that it had access to 43,000 global retail doors.

However, by the 2018/19 season, the firm had only achieved access to 2,975 doors.

Nike, however, says it can offer sales in 6,000 stores with the potential for that to rise to 13,000 worldwide.

(Image: Photo by Michael Regan/Getty Images)

The club says last year it entered into exclusive negotiations with New Balance, according to the terms of the contract, and commissioned a review into the company's reach by accountancy firm Deloitte.

According to the court papers, Deloitte concluded "that a brand like Nike could super charge distribution in a way challenger brands [like New Balance] are not able to do."

The club says the failure to agree a deal meant it was able to negotiate with other businesses, although a clause remained in place stating that New Balance should be allowed to attempt to match any offer.

Club's stinging rebuke to 'contrived' New Balance offer

Far from resigning itself to defeat, New Balance dug in and tried to exercise the renewal option on August 16 this year - saying it could match all the relevant promises made by Nike.

The response from Liverpool FC was stinging, and means questions will be raised as to any future relationship with New Balance should the American firm win in court.

According to the court documents, Liverpool claim: "The Club does not consider the New Balance offer to be a genuine one.

"This is both because of the contrived and unconsidered replication of the warranties and terms in the Nike offer, and because New Balance cannot deliver on those warranties and terms..

"The Club does not consider the New Balance offer to be a bona fide attempt to match the terms of the Nike offer."

New Balance claims marketing and distribution clauses offered by Nike are not "measurable" elements of the offer they have to match to get the deal renewed - but say they could match them in any event.

New Balance aim to "match ambition"

In a statement to The Athletic last month, New Balance said: "New Balance is proud to be the official kit sponsor of Liverpool Football Club.

"Since 2011, when we entered into a record breaking sponsorship with the club, we have delivered two of the biggest selling home kits for Liverpool fans and we continue to match the ambition and achievements of the club as it grows from strength to strength.

"As a long standing and committed sponsor, we are keen to continue our strong partnership with Liverpool Football Club and renew our agreement in 2020. In line with our current contract, we have matched the offer made by Nike.

"As part of the contract renewal process, LFC has called into question elements of the agreement and as such we are asking the courts for clarity on this case.

"Both we and the club are keen to resolve any contractual challenges as quickly as possible and have agreed to an expedited process in the courts."

Liverpool confirmed legal action had been taken by New Balance but say there will be no comment while proceedings are ongoing.

The ECHO will be providing live updates from the High Court in London for all three days.