Corinthians resist Adidas temptation to stay with old ally | OneFootball

Corinthians have elected to renew their long-term partnership with Nike, but, as reported by UOL, the final agreement still hinges on extended discussions over several contractual clauses before signatures are exchanged. The board, led by interim management under Osmar Stabile, prioritized swift action due to tight response deadlines from both Nike and rival bidder Adidas, yet maintained that no binding deal would be signed without detailed analysis of each significant term.

Nike’s proposal ultimately won out over Adidas, primarily due to a combination of improved financial terms and the avoidance of potentially costly legal entanglements. According to UOL, Nike offered Corinthians a guaranteed minimum of R$59 million per year, outpacing Adidas’s proposal, which included R$53 million in annual cash and a range of additional benefits—such as R$18 million in sponsorship, R$35 million minimum royalties, kit delivery valued at R$6 million for 60,000 pieces per year, and R$2 million annually for marketing initiatives. Importantly, Nike agreed to raise royalty payments to R$41 million, R$6 million more than Adidas’s offer. For all other categories, Nike matched its competitor’s figures.

The renewal’s precise duration is still under discussion, though major adjustments on this front are considered unlikely. Corinthians are also negotiating for a penalty clause to protect themselves should Nike fall short in product deliveries, a particular sticking point after repeated supply issues in recent seasons. Another key topic is shipment volume incentives: Nike’s contract enables Corinthians to earn additional sums for surpassing 750,000 kits sold annually—an easier target than the one-million-piece threshold set by Adidas.

While Adidas had dangled a R$100 million signing bonus as part of its pitch, Nike’s response was to offer the same amount, but structured as an advance on future payments rather than an outright up-front fee. The promise of immediate cash was tempting, but the club’s board deemed the stability of staying with Nike—and the legal risks of a switch—far more decisive.

Indeed, the threat of expensive litigation became a central factor in the board’s deliberations. The current Nike contract includes a provision for all disputes to be resolved through one of Brazil’s most costly arbitration courts. After Nike, through its Brazilian representative Fisia, triggered an automatic renewal clause at the end of last year—a move that extended the existing deal to 2029—the prospect of moving to Adidas brought the likelihood of a protracted and expensive legal dispute with formidable odds stacked against Corinthians. Estimates cited by UOL put potential losses near R$100 million had the club changed suppliers and failed in arbitration.

Nike further sweetened its offer by agreeing to forgive debts Corinthians owed for exceeding previous annual kit quotas. This gesture, along with higher baseline payments, helped tip the scales in Nike’s favour.

Corinthians’ final deal will depend on further negotiations to address these critical points, but the decision underscores a preference for predictability and risk aversion over the uncertainty of a wholesale switch to a new provider.

Source: UOL