BERLIN - Adidas AG said on Wednesday it is ending its sponsorship of English soccer side Chelsea six years early, opening the door to an unnamed rival and prompting the German sportswear firm to raise its full-year profit forecast.
Adidas, which has sponsored Chelsea since 2006, said it had reached a mutual agreement to end the deal on June 30, 2017 year, instead of in 2023 as originally agreed, allowing the club to enter into a new agreement with an unnamed competitor.
It said the move was in line with a strategy shift announced last year to partner with fewer teams as it moves more of its marketing budget toward top individual players, digital media and grassroots campaigns.
Adidas agreed in 2014 to pay 750 million pounds ($1.08 billion) to replace Nike as sponsor of English soccer side Manchester United for a decade, a record kit deal for the sport. It has also taken over from its U.S. rival at Italian champions Juventus, while extending its contract with Germany’s No. 1 team Bayern Munich.
As compensation for early termination of contract, Adidas will receive a payment from Chelsea in 2017 that will lift its net income in the second quarter by a sum in the mid-double-digit million euros. It did not say how much the compensation payment would be.
Adidas said the group’s net income from continuing operations is now forecast to increase by around 25 percent in 2016, to around 900 million euros ($1.03 billion), more than the 15-18 percent rise previously targeted.
Its operating margin is now projected to increase to a level of around 7.0 percent from a previous 6.6-7.0 percent.