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Takeaway: Did Nike deliberately inflate the price Puma paid?

Puma to Outfit Arsenal Football Club

(http://online.wsj.com/news/articles/SB10001424052702303553204579346393097168058)

Pyrrhic Victory for Puma? - ars 

  • "Puma AG said it would supply the uniforms and merchandise for English Premier League team Arsenal Football Club..."
  • "He wouldn't comment on the value of the deal beyond saying it represents the 'biggest deal in Puma and Arsenal's history.' British press reports suggest Arsenal will receive £30 million ($49.7 million) a year for the five years of the deal."

Takeaway from Hedgeye Retail analyst Brian McGough: Puma beat out Nike for the right to spend $50 million to put their logo on Arsenal's jersey. Nike is currently in the midst of negotiations with Manchester United, and most likely bowed out of the Arsenal talks after Puma inflated the price. Either that, or in typical Nike fashion, it knew how badly its competitor wanted the deal, so it bid up the price knowing that it would ultimately walk away.

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