WHY DID FLAMENGO TAKE A LESS PARTICIPATION IN SALES IN THE CONTRACT WITH ADIDAS? CHECK OUT

Flamengo's Deliberative Council votes next Monday (29) on the renewal of the contract with the sports equipment supplier, Adidas. The new bond will have some very important changes for the business between the parties, including the issue of royalties.

O Rubro-Negro and Adidas have agreed a contract until 2029. The current contract was signed in 2022 and runs until 2025, but the parties opted for the extension at this time. Royalties for some pieces are expected to decrease in this new contract. They are the amounts that the manufacturer pays to the brand holder for the granting and use of rights.

Marcos Senna, Flamengo's marketing director, explained this point. He recalled the jump that Rubro-Negro made in the percentage in a previous contract, but the consequences that this had on the market.

"In 2013, we signed a contract with royalties of around 11% to 12%. We played, in the renewal, for 35% per piece. Apparently this was very good for Flamengo, it gave a little more money. We tried this in the market, but this 35% crushes the margins a little even in retail", he began.

"Our retailer lives off Flamengo. Our shirt sells. The team wins, it sells. The other pieces don't sell in the same way. So, we are trying to adjust the royalties of these pieces, let's say, peripheral ones, and also adjusting other parts of the contract to compensate. Mainly ensuring solidity in the contract. There is no way to make jumps in money", said Marcos Senna.

Senna also mentioned that the club sought a balance in supply and management. demand. The manager cited examples of what happened in the 2022 and 2023 season.

During the negotiation process, Fla received surveys from Puma and other lesser-known suppliers. There were even signs of bigger proposals, but the global production and dissemination capacity weighed in favor of Adidas, as published by Rodrigo Mattos, columnist at UOL.

"The idea is to have a longer and more secure contract for Flamengo . We had two years of contract in 2022 and 2023. In the first year, Flamengo won the Libertadores and Copa do Brasil, an explosive demand. href="https://gazetadourubu.com/noticia/de-olho-no-rival-botafogo-afasta-detaque-da-spiração-por-conta-de-suposta-agressao" target="_blank">four weeks< /a>. And Adidas needs six, eight months to produce a new order. We saw the "drama", in quotation marks, of having won: the product was scarce in stores the following year, but did not win titles. Administration is expensive and complex. We focus on having a solid and safe way for Flamengo to not participate too much in this risk."