Does it make sense for a league to have a single kit supplier?

The last professional league that plans to join an already large group is Liga MX, the highest representation of Mexican football. The idea, far from nearing its realization, would require a single supplier for all the teams (18) of the top league in Central America. The new business model that Mikel Arriola, executive president of the Liga MX wants to build, is similar to the one already present in many leagues: the MLS, the Canadian Premier League, the Chinese Super League but also the NBA and NHL. Each of the federations to which these leagues belong has a single supply contract with a brand: Nike and Jordan for American basketball, adidas for MLS and ice hockey, Macron for the Canadian championship and again Nike for Chinese football.

Sports sponsorship is one of the most profitable sectors for clubs and companies that are constantly trying to increase their market value. Much of this value inevitably passes through agreements that individual teams enter into with third parties, in compliance with the laws that establish the league they belong to. Among the major revenues is that of technical sponsors, able to generate profits both for supply and for merchandising. But in the last 15 years, several leagues have opted for the centralization of these resources, particularly those that come from supplier kits.

The "single kit supplier" strategy, as we read from Arriola's interview with ESPN Deportes, serves to recover what the severe crisis from the pandemic has caused: "We must demonstrate that the market pays more if it is a league that negotiates with a brand. There are assets that can be sold better if they are centralized". The economy of scale referred to by the number one in Liga MX is a practical solution to "return the flow of money to the teams" and to increase more targeted investments.

Among the pros there are also coordinated marketing campaigns to improve the image of a league, the possibility of sharing revenues fairly and avoiding too sharp differences between the companies. From this point of view, the MLS is an excellent reference: the agreement with adidas - renegotiated in 2017 after the 150 million dollars paid for 10 years since 2005 - has increased the value of the teams and the league exponentially. The details of the latest extension have not been published, but according to a Forbes estimate the value of the latest contract between the three stripes and Major League Soccer is almost 700 million dollars. Even in the case of the Super League there are no exact figures, but the league has focused on one of the main sports brands in the Chinese market and has secured the supply of a top brand with a long-term contract.

If the pros are not to be underestimated, the cons must also be weighed. "The biggest obstacle is being able to make the big clubs understand these dynamics, which have always been reluctant to the idea of centralized agreements", recalls Mikel Arriola in the interview. The president's optimism must come to terms with reality and it will take a lot of work, although he is sure that the market offers more if a league and not a club sits at the desk. The interests of the club, especially if you try to carry this business model into the main European leagues, are often higher than those of the league to which it belongs and existing contracts are worth more than those signed by a league.

The possibility of making more convenient agreements would be lacking, as well as the difficulty of having a unanimous consensus from 20 clubs that battle on practically everything. In short, even if the business model could work, it is a strategy that is more adaptable to a low-medium profile league than a Premier League, Serie A or Liga - with the exception of NBA and NHL, belonging to a world whose dynamics are too distant from those of football. There are successful benchmarks, interesting case studies to evaluate, but at the moment in Mexico, as in other scenarios, reaching this level seems almost utopia.