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Why Kit Deals Leave Everton Begging

Searching questions on the Kitbag partnership

At the Keeping Everton in the City website, interest in last week's Kitbag revelations has prompted a follow-up article in response to fans demanding to know why the club's shirt sponsorship, merchandise sales and kit supply deal seem to pale in comparison to the Blues' peers in the Premier League.

Some excerpts from the KEIOC article:

Merchandise Sales revenue is more difficult to determine as usually only the total commercial income is revealed in clubs accounts. One club that does itemise this is Spurs, last year receiving £10m from merchandise sales. Following repeated losses, Everton outsourced this income stream in 2007 and their current outsourcing partner, Kitbag, pay Everton up to £3m per annum to control every aspect of our merchandise operation. For Everton this was an ideal solution, no need to invest in a complete overhaul of the commercial operation, no need to run a series of shops or operate an e-commerce website, no staff, no stock, in fact no costs whatsoever and best of all the payment goes straight to the bottom line, it's pure profit.

Since outsourcing their retail and catering operations Everton's total commercial income has seen a £5m improvement over the last five years; in 2007 it was £7m, 2008 £9m, 2009 £9m, 2010 £10m and £12m in 2011. By comparison Aston Villa has seen an £11m increase [£6m in 2007, £11m in 2008, £12m in 2009, £14m in 2010 and £17m in 2011] and Tottenham Hotspur a £20m increase since 2006 whilst Liverpool, despite something of a financial and footballing odyssey in recent years, has seen their commercial revenues increase by £34m [£43m in 2007, £51m 2008, £60m in 2009, £62m in 2010 and £77m in 2011] with at least an additional £13m to come from their Warrior kit supply deal in 2012, which will astonishingly take their commercial income alone past Everton's total turnover.

The growth of these kit supply deals and the importance given to them, by both clubs and manufacturers, cannot be underestimated... Adidas and Nike account for a massive 44% of the total spend on these supply deals yet remarkably Everton received nothing when they recently switched suppliers from Le Coq Sportif to Nike; nothing in an era where their peers in the premiership are receiving record deals, nothing in an era when the manufacturers are spending hundreds of millions with clubs to secure these deals, nothing in the era of outsourcing our business to Kitbag.

Everton's fans and shareholders were led to believe that the Kitbag deal consisted of running the retail operation which had previously haemorrhaged money and required urgent attention by 2006. We were told that the ten year £32m deal related to the operation of the shops and the online business. We're concerned over Kitbags actual role in Everton's kit supply agreement and we're concerned over what the £7m sponsorship, advertising and merchandising revenue figure in Everton's accounts is comprised of.

We would like to ask the board some pertinent questions on this subject; for example, have we forfeited the right to negotiate an independent kit supply agreement over to Kitbag as part of the ten year deal? Why, in an era of multi-million pound deals, have Everton received nothing from one of the world's major kit manufacturers who are one of the leading proponents of making payments to secure kit supply agreements? Are Kitbag in effect in receipt of these manufacturers' payments, making Everton's ten year agreement effectively self-financing for Kitbag thereby making them the recipients of all revenue from the clubs retail operations? If this is not the case why has the Everton brand been so dramatically undersold in terms of the kit supply agreement?

Quotes or other material sourced from Keeping Everton in Our City

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