A detail view of the MLS logo on the Adidas White 2023 MLS Speedshell Pro Ball during the MLS Pre-Season 2023 Coachella Valley Invitational match between D.C. United v LAFC at Empire Polo Club on February 6, 2023 in Indio, California.
- Major League Soccer and Adidas have renewed their partnership.
- Adidas will also work with MLS on expanding the U.S. audience for soccer.
- MLS kicks off its 28th season this week.
Major League Soccer and sportwear giant Adidas agreed to a multiyear extension of their partnership.
The deal, announced days before MLS kicks off its 28th season, goes through 2030 and is valued at $830 million, according to a person involved in the deal. It represents Adidas' largest-ever investment in North American soccer.
Their current contract, set to expire next year, was signed in 2017. At the time, it marked a record-breaking deal for North American soccer for Adidas. That deal was valued at $700 million.
Under the terms of the new agreement, Adidas will continue to supply the league with branded apparel, footwear, training gear and the official match ball.
"We have sponsorship revenue of nearly a billion dollars over a period of time, lots of ticket revenue, lots of local sponsorship, getting the largest company in the world to give us the first global digital partnership — every game on a device," MLS Commissioner Don Garber told CNBC's "Squawk Box" Wednesday. "So that's the pitch deck and obviously when you got a partnership like this it takes that to another level."
The German sportswear giant will also work with MLS on various initiatives and financial investments to grow the sport and business on and off the field ahead of the 2026 World Cup that's being held in North America.
Money Report
"Looking ahead to the 2026 World Cup, we see many possibilities to build upon the strong foundation and positive momentum we have already created together. The league's future is bright and we are proud to be part of it," Rupert Campbell, president of Adidas North America, told CNBC.
The relationship between Adidas and MLS dates back to the league's inception in 1996. Eight years later, Adidas became league-wide partners, an arrangement that has continued until the present.
Ups and downs
It has been a tumultuous year for Adidas, including the turmoil surrounding Ye, formerly known as Kanye West, following his antisemitic remarks. The company expects $1 billion in losses after dropping the rapper and fashion mogul. The brand is also under the new leadership of Bjorn Gulden, the former CEO of rival Puma.
These issues didn't affect the negotiations, which took a year, according to a person familiar with the situation. MLS was also confident that Adidas would properly resolve the issues with Ye, said the person, who declined to be named because they were not authorized to speak on the matter.
Major League Soccer has seen rapid fan and financial growth since the last contract negotiations. The league has grown from 16 clubs in 2010 to 29 teams today. Since 2019, the average team value has jumped 85% to $579 million, according to Forbes. Earlier this month, Los Angeles Football Club became the first team in the league's billion-dollar club, with a franchise valued at $1 billion. In 2008, the average club valuation was $37 million.
Attendance is also at all-time highs. The league saw a record 10 million fans in 2022, breaking the previous record of 8.6 million in 2019.
Investors have taken notice. The league has attracted a diverse group of celebrity owners that includes basketball star James Harden; actors Matthew McConaughey, Will Ferrell and Reese Witherspoon; musicians Ciara and Macklemore; and football stars Russell Wilson and Patrick Mahomes.
In June, the league entered into a 10-year deal with Apple TV to stream all MLS Leagues Cup matches through the MLS Season Pass exclusively. Commissioner Don Garber has said he hopes that the new partnership will help the league to continue to connect with a younger demographic. That deal is widely reported to be worth $2.5 billion, with Apple paying MLS $250 million annually.
The league and Adidas are trying to expand their cultural reach, as well. Adidas introduced a special Nashville SC Johnny Cash jersey last week. The team will wear it during its season opener, with Johnny Cash music blaring from the stadium. Nashville minority owner Witherspoon won an Oscar for playing June Carter Cash in 2005's "Walk the Line," which can be streamed through Apple.
The MLS season begins Saturday.
