Real Madrid in talks with Under Armour over new kit deal that could see Adidas shown the door

Adidas' deal is due to run until 2020 but Real Madrid could exit it early

Real Madrid are reportedly in talks with Under Armour over a new kit agreement that would see the club ditch Adidas in favour of a new £127m a year deal with the US sports brand.

The La Liga club’s partnership with Adidas stems back to 1998 and their current agreement is due to expire in 2020; however, according to Spanish newspaper Marca, they could be preparing to part ways with the German brand and side with its US rival.

The reports in the Spanish daily claim that Real Madrid are demanding a record-breaking deal worth £127.2m ($158.6) a year in order to overtake Manchester United and FC Barcelona as the highest-paid club in the world of football.

United’s 10 year deal with Adidas is worth £75m a year while FC Barcelona’s recent five-year renewal to their deal with Nike will see them generate £140m a season from 2018 onwards.

Real Madrid are said to be unhappy with their £34m a year deal with Adidas and are looking to land a ten-year contract with Under Armour that would surpass the billion-dollar mark, allowing Los Blancos to lay claim to the most lucrative kit deal in the sport.

Adidas were in talks with Real Madrid last year over a possible renewal to the kit supply deal, but no agreement was reached. They could buy themselves out of the partnership just as Premier League club Chelsea did last year when they announced that they would be switching from Adidas to Nike.

The club recently suffered a commercial defeat at the hands of Manchester United who knocked them off the top spot in the Deloitte Money League table - an annual survey of the world's richest football clubs.

Under Armour has endured frustrations of its own recently with the company’s shares declining by 25% at the end of last month after falling short of Wall Street estimates. Its share price was the worst-performing sports brand stock of 2016, losing 40% of its value year-on-year. The brand’s chief executive and chairman Kevin Plank caused further damage after describing president Donald Trump as an “asset” to the United States, promoting backlash from the public.

The brand already has a presence within European football through its partnerships with Southampton FC and Tottenham Hotspur. A deal with Real Madrid would significantly boost its international reach though, particularly with the likes of Cristiano Ronaldo and his global reach across social media.

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.