(Corrects description of Nike in first paragraph in story published yesterday.)
AS Roma (ASR) and Nike Inc. (NKE:US) are set to sign a long-term pact for the world’s largest supplier of sporting goods to produce and market the Italian soccer team’s apparel around the world, according to two people familiar with the situation.
Nike will replace BasicNet SpA’s Kappa brand, which has been the team’s technical sponsor since 2007, and place its swoosh symbol on Roma’s jerseys and other team-wear from next season, the people said, speaking anonymously because the deal hasn’t been made public. They didn’t reveal financial terms. Nike spokesman Charlie Brookes and Roma’s Catia Augelli declined to comment.
Beaverton, Oregon-based Nike and Germany’s Adidas AG dominate soccer markets in Europe’s five major leagues with the exception of Italy, where local brands Kappa, Macron and Errea have had greater traction. Roma, which last year announced plans to build a new stadium, has been negotiating with potential partners for eight months after problems developed with some products supplied by Kappa, one of the people said.
“This is a very crucial decision for the club because a technical sponsor can ensure you global distribution, global visibility, and help increase business,” Roma marketing director Christoph Winterling said in a Feb. 22 interview, though he declined to reveal the identity of the new partner. “This deal will give the club a very, very important future. Together with the technical sponsor, we will also invest in different areas in and around the new stadium.”
The agreement with Nike comes two years after a U.S. investment group led by hedge fund manager James Pallotta became the first foreign owners of an Italian soccer team. They’ve revamped Roma’s commercial operations in an effort to increase revenue to fuel the team’s on-field performances. The club hasn’t won a league title since 2001 and is seventh after 28 games this season.
Still, guided by a management team that includes Mark Pannes, former head of sport at HSBC Private Bank, Roma has sealed contracts with Volkswagen AG and Walt Disney Co. Sponsorship in the first half of the 2012-13 fiscal year generated 6.3 million euros ($8.2 million), up 8.6 percent from a year earlier, the club said in a Feb. 28 filing.
“In terms of sponsorship deals and hospitality sales, we have an increase of 20 percent,” Winterling said.
Roma joins Manchester United, Barcelona, Juventus and Paris Saint-Germain, league leaders in their respective countries, in Nike’s stable of affiliated teams. The agreement with Roma will be similar to the one Nike has with Manchester United, said one of the people.
Under the terms of that agreement, Nike pays the record 19- time English champion (MANU:US) a fixed royalty fee and 50 percent of all profit from team-branded goods it sells around the world. Nike and United are currently negotiating to extend a partnership that started in 2002.
“We’re looking for more and more global companies, we know that we need global companies for us to grow and for us to get more money,” Winterling said at Roma’s training ground in Trigoria, south of the capital. “The money is honestly very limited in Italy if we want to grow, so we have to look for big partners.”
Roma in December announced plans for a new stadium that will seat between 55,000 and 60,000 spectators when it opens in 2016. Winterling said the facility is crucial to developing the club’s growth strategy. The team currently shares the publicly owned Stadio Olimpico with local rival SS Lazio.
“The new stadium will be a key factor in the growth in all the commercial areas -- sponsorship, merchandising, licensing, ticketing,” Winterling said.
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To contact the reporter on this story: Tariq Panja in London at email@example.com and Jeffrey Donovan in Rome at Jdonovan@bloomberg.net