Umbro and The Football Association unveil long term deal to 2014
Umbro plc today announces that it has entered into a series of agreements with The Football Association (“The FA”) and a new agreement with Wembley Stadium that will see Umbro strengthen its current relationship with the FA Group and demonstrates its commitment to football at all levels.
The new deal is structured as four separate agreements:
Umbro has entered into a new contract to 2014 to design and supply, on an exclusive basis, playing and training kit to England Teams at all levels and for the distribution and sales of replica product worldwide
Umbro has agreed to become one of four Founding Partners of the new Wembley Stadium
Umbro will partner The FA in the further development of the National Football Centre (NFC) at Burton–upon–Trent, becoming the title sponsor of the Centre
Umbro will become the exclusive supplier of footballs to The FA at all levels of the game
A new England kit contract taking the relationship to 30 years
Umbro has entered into a new contract to 2014 to design and supply, on an exclusive basis, playing and training kit to England Teams at all levels. Umbro has the exclusive rights to manufacture, distribute and sell replica kit worldwide and to use the England ‘Three Lions’ Crest on a broader range of other licensed apparel and equipment than was previously contracted. Umbro’s current relationship with The FA commenced in 1984 and the previous kit supply and sponsorship agreement was due to expire in 2010.
Umbro will also continue to participate in The FA Partners Sponsorship Programme which gives Umbro various marketing rights, including branding at England Home International matches.
In return for its England kit rights, and consistent with the structure of the previous contract, Umbro has agreed to pay The FA annual guaranteed royalties and other payments due over the life of the contract.
Becoming Founding Partner of Wembley Stadium
Opening in 2006 the 90,000-seat venue will be one of the biggest and most sophisticated stadiums in the world. Umbro will be one of four Founding Partners. Wembley Stadium will be the home of the England football team and will host a wide range of sporting, musical and live events, including The FA Cup Final and major music concerts.
This partnership secures Umbro a variety of marketing rights in relation to the national Stadium. Umbro merchandise will also be sold at Wembley Stadium’s official retail outlets.
Partnering The FA in the further development of the National Football Centre
The National Football Centre is intended to become the hub of The FA ’s football development and education programme, protecting the future of the sport at all levels ranging from international stars to youth development. It is located in 352 acres of historic parkland within The National Forest, close to Burton–upon–Trent. This stand alone contract will see The FA and Umbro work together to develop the site further, subject to the successful conclusion of various partnership arrangements and obtaining the necessary permissions.
Supplying footballs to The FA at all levels of the game
From 1st August 2006 Umbro will become The FA’s exclusive supplier of footballs. This will include supplying matchballs for The FA Cup and for England matches at all levels, including Women’s and Youth games, which are played in England. Umbro currently provides matchballs for a number of national teams and clubs around the world, with the balls being used in international games, certain Champions League games and in domestic leagues.
Financial effects to Umbro
The enhanced England kit contract is similar in structure to the previous deal in that it includes annual guaranteed royalties and further royalty payments based upon turnover generated from licensed product sales. There is a £3m exceptional cost to terminate the existing contract, payable in 2005.
Umbro will pay additional annual amounts to secure the extra rights associated with Wembley Stadium, supply of footballs and broader use of the England Crest. It is expected that the additional revenue and profit generated from these rights will more than cover the annual costs associated with them.
Umbro will also pay £12m to the FA as part of the further development of the National Football Centre at Burton–on–Trent. This will be accounted for as an exceptional item in the current year but will be paid in three stages with £2m payable in 2005, £6m in 2006, and £4m in 2007.
Overall, the aggregate effects of the termination of the existing contract and entry into the new contracts are expected to be earnings neutral during the period 2006 - 2010 and earnings enhancing thereafter.
Peter McGuigan, CEO of Umbro, commented:
“We are thrilled to have strengthened our strong relationship with The FA and look forward to reaching the 30 year mark of working together. We also look forward to developing a similar strong relationship with our new partners at Wembley Stadium. Today’s announcement gives us the platform to drive our business forward, not only in our home market, but also in our growing overseas markets”.
Jonathan Hill, Group Commercial Director of The FA, commented:
“The FA is delighted to have secured what we believe is an extremely significant deal which will benefit all of The FA Group and guarantee significant revenues going into all levels of the game right through to 2014. This deal is much more than an extension of the existing kit supply agreement and will cover a wide range of areas where we believe our existing excellent relationship with Umbro can only lead to further benefits for the Group.”
Michael Cunnah, Chief Executive of Wembley National Stadium Limited, added:
“We are delighted to be announcing our second Founding Partner and in Umbro we feel we have the perfect partner for our world class Stadium. Umbro’s huge support and contribution to all levels of English football is well known and respected. The addition of another globally recognised brand alongside our first Founding Partner Microsoft is fantastic news for the Stadium. We are delighted to welcome Umbro to our ever-growing sponsor family.”
Umbro sales increase
The UK sportswear manufacturer, Umbro, has reported a steep increase in annual sales and profits, thanks to high demand for its replica England uniforms during the Euro 2004 football championships.
Last year's profits tripled to GBP 15.4 million and turnover grew to GBP 140.4 million.
Furthermore, Umbro signed a distribution deal with sports merchandise retailer Foot Locker in the US in order to re-establish the brand there. According to reports, this process is going very well.
Last week Umbro also signed a four-year sponsorship agreement to distribute replica uniforms for the Scottish football club Rangers.