After months of rumors and secret meetings in Madrid, Paris, and Zurich, Kylian Mbappe has officially decided to leave Nike for a cash and equity deal with On.
Mbappe is only 27, but his relationship with Nike goes back nearly two decades. Nike started sending Mbappe free gear when he was eight. A couple of years after that, Nike signed Mbappe to a real contract, making him one of the youngest athletes in history to sign with the swoosh. And the relationship has only grown from there. Nike has paid Mbappe hundreds of millions since he turned professional, and the company still sponsors the youth team he used to play for.
But now Mbappe will move on. Like the deal Roger Federer received when he left Nike for On in 2019, Mbappe has reportedly signed an agreement with On that includes both cash and equity. These deals always include the same incentives — higher cash payments if Mbappe wins a World Cup or Ballon d’Or — but the equity component could eventually be even more valuable, as Federer’s 3% stake in On was worth roughly $330 million when the company went public in 2021.
Many people are saying this is another death blow for Nike. After watching its stock fall 75% over the last five years, one of the world’s most famous athletes is leaving the iconic brand for another company that doesn’t even have a football business. But that’s not the right way to think about it. Nike had the right to match On’s offer but declined. That’s not necessarily surprising. If the athlete truly wants to leave, these offers are usually written in a way that makes it nearly impossible for the existing sponsor to match, and brands like Nike typically have a rule that they won’t spend more than 10% of a department’s total revenue on sponsorships, which is why Nike ultimately lost Roger Federer back in the 2010s.
So no, this isn’t a Nike story. It’s an On story, and more importantly, a technology and apparel story. On isn’t just signing Kylian Mbappe to help launch its football business. The up-and-coming brand believes Mbappe will be the perfect person to promote a new proprietary technology that could be much bigger than sports.
Here’s what you need to know…
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