Adidas and Major League Soccer renew their collaboration

Major League Soccer and sportswear giant Adidas agreed to a multi-year extension to their partnership.

The deal, announced days before MLS kicks off its 28th season, extends through 2030 and is valued at $830 million, according to a person involved in the deal. It represents Adidas’ largest investment ever in North American soccer.

Their current contract, which expires next year, was signed in 2017. At the time, it marked a record deal for North American soccer for Adidas. The 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 equipment and the official match ball.

“We have almost a billion dollars in sponsorship revenue over a period of time, tons of ticket revenue, tons of local sponsorships, getting the biggest company in the world to give us the first global digital partnership — every game on a device,” MLS Commissioner Don Garber told for CNBC’s “Squawk Box” on Wednesday. “So that’s the pitch deck and obviously when you have a partnership like this it takes it to another level.”

Adidas renews its long-standing partnership with Major League Soccer until 2030.

Source: Major League Soccer

The German sportswear giant will also work with MLS on various initiatives and financial investments to grow the sport and operations on and off the field ahead of the 2026 World Cup held in North America.

“As we look ahead to the 2026 World Cup, we see many opportunities to build on the strong foundation and positive momentum we have already created together. The future of the league is bright and we are proud to be a part of it,” Rupert Campbell, President for 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 to this day.

Ups and downs

It’s been a tumultuous year for Adidas, including chaos surrounding Ye, formerly known as Kanye West, following his anti-Semitic remarks. The company expects 1 billion dollars in loss after drop the rapper and fashion mogul. The brand is also under the new management of Bj√∂rn Guldenformer CEO of rival Puma.

Those issues did not 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 recent contract negotiations. The league has grown from 16 clubs in 2010 to 29 teams today. Since 2019, the average team value has increased by 85% to $579 million, according to Forbes. Earlier this month, the Los Angeles Football Club became the league’s first billion-dollar club, with a franchise worth $1 billion. In 2008, the average club valuation was $37 million.

Attendance is also at an all-time high. The league saw a record 10 million fans in 2022, beating the previous record of 8.6 million in 2019.

Investors have taken note. The league has attracted a diverse group of celebrity owners that include 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 included one 10-year contract with Apple TV to stream all MLS Leagues Cup matches exclusively through the MLS Season Pass. Commissioner Don Garber has said he hopes the new partnership will help the league 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 shirt last week. The team will wear it during their season opener, with Johnny Cash music from the arena. 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 on Saturday.