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FIFA Extends Adidas Partnership to 60 Years With New Accord

Soccer governing body FIFA signed a new accord with Adidas AG (ADS) through 2030, extending one of sports’ oldest commercial relationships to 60 years.

FIFA didn’t disclose financial details of the agreement with the second-biggest sporting goods manufacturer, a sponsor since the 1970 World Cup. The Herzogenaurach, Germany-based company said Nov. 7 it expects the build-up to next year’s World Cup in Brazil to boost revenue in the current quarter.

The quadrennial event is responsible for more than 90 percent of FIFA’s income, which last year topped $1.1 billion, including about $350 million from World Cup-related sponsorship.

Adidas has been “at the heart of the action at every tournament since the 1970 FIFA World Cup,” the ruling body’s marketing director Thierry Weil said in an e-mailed statement. Adidas will unveil its official match ball ahead of the Dec. 6 draw for the 32-team event.

“We are delighted that this long-term strategic partnership will continue until at least 2030 and we are looking forward to writing new chapters of football history together,” Weil added.

The contract extension comes six months after FIFA President Sepp Blatter said his organization had “emerged from troubled waters” following a reform program it was forced to embark on. Corruption allegations against several high-ranking FIFA officials led to calls for change from stakeholders including sponsors such as Adidas.

Nike Rivalry

“It was a natural step for us to extend one of the most successful partnerships in the history of sports marketing,” Adidas Chief Executive Officer Herbert Hainer said. “This unique partnership and our extensive presence at all FIFA World Cups will help us to expand Adidas’s position as the leading football brand worldwide.”

Adidas has been battling with Nike Inc. (NKE), the biggest sporting goods retailer, for supremacy in the soccer market. Hainer said on a Nov. 7 conference call that soccer sales will rise to a record 2 billion euros ($2.7 billion) next year.

National jerseys including those for Germany, world champion Spain and Argentina were released last week and the company also this month released a “Samba” range of brightly colored footwear worn by players including Barcelona’s four-time world player of the year Lionel Messi and Real Madrid’s Gareth Bale, soccer’s most expensive transfer. The rivalry with Nike is likely to intensify in the coming days as the Beaverton, Oregon-based company prepares to unveil its latest version of the jersey worn by record five-time champion Brazil.

In May, FIFA said its World Cup sponsorship program was complete after Grupo SBF’s Centauro unit, Latin America’s largest sporting goods retailer, signed a deal to become the final national sponsor of the monthlong tournament. Global sponsorship packages for the 2014 World Cup sold out in July 2011 when FIFA signed Johnson & Johnson (JNJ), the world’s biggest seller of health-care products.

Brazil will open the competition on June 12 in Sao Paulo. The final is in Rio de Janeiro on July 13.

To contact the reporter on this story: Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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