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Chelsea and adidas have been in business together since 2006, and had an agreement in place to continue that partnership through the 2022-23 season. However, today the two parties announced that they have mutually agreed to terminate that agreement following the 2016-17 season (June 2017).
After 10 years of adidas-manufactured kits, Chelsea will be in the market for a new partner after next season.
Both sides were cordial and complimentary in their parting words:
Having begun our relationship in 2006, we would like to thank adidas for their fantastic support and cooperation over the past 10 years. In that time the club has lifted the UEFA Champions League, UEFA Europa League, two Premier League titles, four FA Cups and two League Cups, and we look forward to a successful final year of partnership.
adidas were just as cordial but dropped the interesting nugget that Chelsea will be paying them compensation at the end of 2017.
As compensation for the early termination of the contract, the adidas Group will receive a payment from Chelsea Football Club in 2017 that will already positively impact the Group's net income this year.
adidas AG wishes to expressly thank Chelsea Football Club for their always professional and successful collaboration, which has included, among other successes, the time of their UEFA Champions League title in 2012 as well as two Premier League titles.
According to Bloomberg, Chelsea will be paying a massive €50 million as compensation to adidas.
Speculation on which side actually wanted this early termination has already begun. Some think that it's adidas who are hoping to focus solely on one major club in the Premier League in Manchester United. Others believe that Chelsea are frustrated with the lack of quality in recent years' kits and are ready to find a bigger and better deal. Given the size of the payoff, the latter explanation seems likelier.
@JakeFCohen much more likely that adidas pulled out. they're ditching teams left, right & centre to concentrate on one per league. (MUFC)
— Raphael Honigstein (@honigstein) May 11, 2016
No matter which side is responsible for the agreement coming to an end, the fact remains that Chelsea will have a new kit manufacturer come the 2017-18 season.