Most of the world are focussed on the football during the European Championship,
but the two superpowers of the sportswear industry - Nike and Adidas - only have eyes for each other.
Coming into the tournament, market-leading Nike had the edge,
with nine of the 24 teams wearing its Swoosh logo, with eight wearing Adidas’ three stripes.
Nike have France, England and Portugal; Adidas has top-ranked Belgium, Germany and Spain.
Quantity and quality, then, and there’s history of confrontation between the two in football,
the most famous example being the tussle over the German national team.
In 2006, Nike offered the DFB, the country’s football federation,
five times as much as it was due to receive from Adidas for the next eight-year contract
between the two, scheduled to start in 2011. Adidas had been paying 10 million euros a year for
that privilege and its history with the country’s various national teams dated back to 1954,
when West Germany first wore Adi Dassler’s new football boots.
They didn’t start wearing Adidas kit until the 1970s,
but the link started with those boots and no amount of American money was going to break it.
Having initially described Nike’s offer of 500 million euros as “madness”,
Adidas chief executive Herbert Hainer threatened to take the DFB to court, claiming his company’s
contract lasted until 2014. For a time, German football was split, with some, including Nike
ambassador Franz Beckenbauer, saying it made little sense to accept less money from Adidas.
In the end, Adidas held on. Just.
“It was a matter of harmoniously balancing tradition, legal concerns and money,”
was how DFB president Theo Zwanziger described the decision.
But it was not an experience Adidas wanted to go through again. When it came time to
renegotiate the agreement in 2016, it handed the reigning
world champions the world’s most lucrative international kit deal, £560mover 10 years,
£130 million more than Nike had spent prising France away from Adidas in 2011.
Three years later, when the DFB asked Adidas about a training base for Euro 2020 and Euro 2024,
when Germany will host the tournament, the company agreed just to build them a new one.
On the site of an old US Army base in an undeveloped corner of its sprawling
headquarters in Herzogenaurach, built “Home Ground”. It’s a 58-bedroom sanctuary that will
house Germany for the duration of this summer’s tournament and the next in three years’ time.
It also boasts Adi Dassler Stadium, the company’s international-standard private pitch; when “Die
Mannschaft” don’t need it, Adidas will use it as a team-building venue and workshop space.
But is throwing money at national associations the best way to build market share?
“The brands get two benefits from these sponsorships: marketing and sales,”
says Matt Powell, a senior industry advisor at US market research firm The NPD Group.
“They are betting on the teams that will go deep in the tournament,
to extend the brand exposure. And then, as we know, fans are quite nationalistic,
so the sales of a team’s jersey can be lucrative.”
Professor Chris Brady, the director of research at the consultancy firm Sportsology, agrees.
“There will be someone who has worked out the balance sheet value of all those mentions in
newspaper and web articles, the advertising benefits of appearing on millions of TV
screens this summer and the picture of a team wearing your kit lifting the trophy.
“And then there is the short-term marketing blast that success can bring in terms of sales.”
Dr Peter Rohlmann runs PR Marketing, a strategic marketing agency based in Rheine,
and has been studying these deals for years.
“What really counts is sales and market coverage,” he explains. “but basically the brands are looking
for partners who will strengthen their position, promote their image and make them money.
“And there is strong correlation between these deals and sales.
To give one example, Adidas sold two million Germany shirts before the 2014 World Cup final
but then sold another million, with the fourth star added, by the end of the year.”
But does it work in quite the way it used to? Isn’t the real action now on digital,
in computer games and YouTube videos? And are youngsters imitating influencers or footballers?
Nike, for example, has noticeably reduced the number of footballers it is sponsoring to wear its
footwear, as well as reducing the amount of money it pays anyone apart from the very biggest stars.
“Some sanity is returning to sponsorships and costs have at least stabilised,” says NPD’s
Powell. “But sport still has tremendous power over the consumer — ‘likes’ don’t always equal sales.”
Dr Rohlmann just believes the brands have got more sophisticated as the world has grown more complex.
“This is where general economic insights come into play,” he says.
“Is it better to sponsor a few, very strong teams and athletes than having
lots of inefficient partnerships? After all, there are activation costs (the amount
sponsors spend on the actual campaigns to promote their products) to these deals.
“But without any marketing rights, a company is pushed onto the sidelines and becomes vulnerable
to ambush marketing. The big sponsorships still provide proof of market standing
and financial strength, which promotes customer confidence, as well as generating media coverage.”
So far, Euro2020 and its vast audience will be providing all of those benefits.