Castore issue £22m announcement after Wolves and Newcastle United jump ship

Newcastle United and Wolves have both embarked on new kit deals this season after moving on from Castore.

Adidas are now Newcastle’s kit supplier in a partnership that has received a rapturous reception on Tyneside.

When that deal was first announced, reports suggested that it would be worth £40m per season to Newcastle, although those headline figures have been dispute.

Wolves meanwhile are now partnered with Sudu, a new sportswear company set up by Chinese owners Fosun with the promise of ‘putting fans first’.

No value for that deal has been announced. Incidentally, Fosun are seeking minority investment in Wolves worth around £75m, partly with the aim of reinvesting in their sportswear portfolio.

Last season, both Newcastle and Wolves were signed with Castore, the Manchester-headquartered brand that has been a major disruptor in the sportswear industry in recent years.

Both deals were inked in 2021-22 and, reportedly, were worth around £3m and £5m per year respectively.

During the course of the partnerships, some supporters complained about quality control issues – and those concerns were echoed by players for Aston Villa, another Castore client.

Castore said it had acknowledged the issues and holds itself to the highest standards.

• READ MORE: £500m-valued takeover could see Wolves eclipse Newcastle United

Castore lose £22m despite Wolves, Villa and Newcastle deals

Castore have just released their financial results for the 12 months up to 4 February 2024, when Newcastle Wolves and Villa were still contracted to the brand.

The company lost just under £22m, which followed a £12m profit in the previous financial year.

Turnover, however, shot up from £115m to £190m.

£106m of their revenue came from the UK – partly from their partnerships with the Premier League trio – while new deals with Bayer Leverkusen, Athletic Bilbao and Feyenoord saw sales in Europe climb to £60m.

• READ MORE: Newcastle join race to sign defender who left Nottingham Forest in 2023 with Liverpool also keen

The true value of a kit deals

When it comes to kit deals, the headline figures are rarely a reliable depiction of how much a club will actually take home from the deal.

Some clubs will overestimate the value of the deal, while others choose to tread a more conservative path.

In Newcastle’s case, it would be a major surprise – although not impossible – if the baseline fee from Adidas was £40m, as has been reported.

Rather, that will likely include structured performance related bonuses, such as a step-up if Eddie Howe’s side qualify for a European competition.

The commission on each unit sold will likely be in the region of 7.5 per cent meanwhile, although that too can vary from contract to contract.

For companies like Castore or Adidas, kit deals are often as much about brand exposure and association as they are about the revenue they generate.

That is especially true for a maturing brand like Castore, who have secured funding and are happy to run at a loss while they are in a growth phase.