European Fortunes, Arsenal Shirt Deal; Kenya Tax Dispute
LAKE: The English Premier League side Arsenal are changing their kit maker for the first time in two decades. The London team have ditched Nike to sign a $50 million a year deal with the German sports brand Puma. A spokesman for the company said the deal was the biggest it had ever brokered. Puma will become the official kit supplier from July the 1st. Our resident Arsenal fan Jim Boulden has more.</s>ARSENE WENGER, MANAGER, ARSENAL: This is a big moment for our club.</s>JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): While Arsenal fans may have wanted to hear manager Arsene Wenger announce a new signing or that he was renewing his own contract, the big moment was, in fact, more at the business end of sport. Arsenal is ditching Nike for Puma.</s>IVAN GAZIDIS, CEO, ARSENAL FOOTBALL CLUB: We've had a really productive -- an excellent partnership with Nike over the years, and it would be wrong of me not to acknowledge the part that they've played as the club has progressed.</s>BOULDEN: But the Nike ticks will be moved from the shirts and from around the Emirates Stadium by July when Puma becomes the North London team's official kit sponsor.</s>BJOERN GULDEN, CEO, PUMA: Deals like this have three values. One is the commercial value of it, how much can we sell of Arsenal and Puma stuff.</s>BOULDEN (on camera): Yes.</s>GULDEN: Then it has a marketing -- how can we develop Arsenal and Puma as a brand across the globe for distribution rights. And then it's the image thing.</s>BOUDLEN (voice-over): Neither side will say how much the deal is worth and, unusually, how long the deal will last. Nike was Arsenal's kit sponsor for 20 years. Arsenal wanted a partner now that is not tied up with Europe's other major clubs, and not one so small that it would struggle to expand Arsenal's presence in Asia and the Americas.</s>GAZIDIS: Puma really give us the scale, but also the ability to focus on us very individually and to be able to think about how Arsenal wants to be represented around the world. So it was a very good mix and a very good fit for us.</s>BOULDEN: Puma says landing its first major English club is a big part of its strategy to push further into football against the top two, Nike and Adidas.</s>BOULDEN (on camera): Of course, whether it's a Nike tick or a Puma on the Arsenal shirt, the bottom line for the fans who sit here is how much of that money will be spent on new players come this summer. Jim Boulden, CNN, at the Emirates Stadium, London.</s>LAKE: Well, you heard there from Puma CEO Bjoern Gulden at the Arsenal news conference. After the deal was signed, he sat down with Jim to explain why the deal is so important for Puma.</s>GULDEN: If you come to our offices, you will see that we have a lot of passionate people that happen to be very, very big Arsenal friends. Enthusiasm on this project from the marketing people to the sign people to the distribution people has been enormous. And I think that's what he's referring to, that there has been extremely a lot of positive energy in this process.</s>BOULDEN: And it's not just about having the Puma on the shirt. It goes much deeper than that.</s>GULDEN: Well, deals like this have three values. One is the commercial value of it, how much can we sell of Arsenal and Puma stuff.</s>BOULDEN (on camera): Yes.</s>GULDEN: Then it has a marketing -- how can we develop Arsenal and Puma as a brand across the globe for distribution rights. And then it's the image thing. So all these things together makes it a very, very important deal for us.</s>BOULDEN: And you're trying to get to be even more football --</s>GULDEN: Yes.</s>BOULDEN: -- as for Puma, because you are firmly number three behind Nike and Adidas. You seem comfortable with that.</s>GULDEN: Both Adidas and Nike have done a good job. They are much bigger than us. We are kind of the underdog, coming from a different side. We are making progress on product. I think we have gotten together a huge asset base that is starting to become very, very good. We signed Balotelli just a couple of weeks ago. So I feel very confident that we can improve and make sure that our retailers and our consumers will get a very good product and that will give us growth. And then what the other two are doing, I can't impact that anyway --</s>BOUDLEN: No.</s>GULDEN: -- so that's why we're optimistic.</s>BOULDEN: You did have to pull your sponsorship for the South African football team for match fixing allegations. So, there's always a risk there.</s>GULDEN: Well, in other contracts, we have to behave and our partners have to behave in a way, and if that's not the case, then the partnership ends.</s>BOULDEN: And on a more positive side, you did just resign Usain Bolt for another -- six years, is it?</s>GULDEN: Well, Usain stands for everything that Puma is. He's the fastest guy in the world, he's a fantastic ambassador that we will use even more. He will run at least until Rio and he will run in Puma. And then after that, we will see. I think we will work with Usain Bolt as long as we are alive and he is alive.</s>BOULDEN: Why does this make financial sense for you, if you are firmly number three? What is it for the bottom line?</s>GULDEN: When you do a deal like this, you make a lot of analysis what it can bring to you, both from the commercial side, from an image side, and the marketing side. And the sum of all this makes this for us a good deal. In today's business, you can't do emotional deals, you have to do them when it makes sense for your business.</s>BOULDEN: Yes.</s>GULDEN: And we, the people inside the company and the people on our board were convinced that this was the right thing to do, and that's why we did it.</s>LAKE: Some of Kenya's top athletes are threatening to stop representing their nation because of a controversial new super tax. Kenya's revenue authority says income from sporting events overseas is now considered taxable. Long-distance runner Wesley Korir says that means athletes will have to pay tax twice. Korir says 30 to 35 percent is already taken by the country where the athlete competed, 15 percent goes to the agent, 10 percent goes to the manager. And Korir says athletes will now have to pay an extra 30 percent tax to the Kenyan government. That would leave between 10 and 15 percent of the winnings left for the athlete. Kenya's revenue authority says athletes who can prove they've paid tax abroad will not be charged twice. MP and former Boston Marathon winner Wesley Korir told CNN's Nima Elbagir the tax authority has not provided enough clarity.</s>WESLEY KORIR, KENYAN LONG DISTANCE RUNNER AND MP: If you go anywhere in the world, people know Kenya because of athletes. Because of the amazing athletes. The only time a Kenyan national anthem is sung out of this country is when an athlete wins a gold medal. So it's -- those are the things that we as athletes feel like we're not appreciated because the government does not pay you for that, the government does not pay you salary. It's your volunteer job. You volunteer to run. You wake up in the morning, you go running, and then you go out there to brand Kenya.</s>NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Well, the Kenyan Revenue Authority says that what they are asking of you is what they would ask of any Kenyan citizen. They're saying that the tax that you are taxed on abroad will be exempted when it comes to being taxed in this country.</s>KORIR: But one thing Kenyans need to know is, OK, you keep saying that what we're asking you is what any other Kenyan citizen. Now they compare us with teachers, they compare us with doctors, they compare us with all these. Do they get taxed outside? No. Do they get their salary outside of this country? No, they get it from this country. They get it from the taxpayers' money of this country. We don't get -- our salary does not come form this country.</s>ELBAGIR: You have no government funding?</s>KORIR: We have no government funding. And that's another thing, too. That's another issue that athletes want to be heard from. We have no -- zero -- government funding. The government does not even care how you live. They don't even care what you eat. They don't even care how you got there. They wait until you've gotten there, you've gotten there yourself, and when you get there, that's when now the government now wants your money.</s>ELBAGIR: So, you could see a situation where athletes were seeking other nationalities?</s>KORIR: Oh, yes, definitely. We will see -- these athletes who have been training for this country, they're big athletes. It's not they don't have an option to go anywhere. They have a lot of options, but they have chosen to stay in this country because they love their country. But now, if their country doesn't love them, they don't have an option, but they will seek for greener pastures somewhere else.</s>LAKE: Google is shelling out big bucks to acquire an artificial intelligence firm. A look at what Google could do with this technology coming up later on QMB.