All in or nothing. It is the phrase that adidas has lived by leading up to and through the 2014 World Cup in Brazil. Today, the phrase bears much more significance than it did at the start of the games. Four teams remain going into the Semi-finals and two wear adidas uniforms (Argentina and Germany) while the other two (Brazil and Netherlands) sport Nike outfits. Adidas was determined to go “all in” with the 2014 World Cup and give Nike a run for its money; it now has a real chance to show off its product with a potential World Cup winner.
The battle between an adidas willing to go all in or nothing and Nike’s “risk everything” campaign is for a larger share of the soccer industry. It is estimated that the brands combine to control roughly 70% of the market. Despite Nike’s dominance over adidas in revenue from sales of sportswear across the world (Nike’s $25 billion in revenue versus adidas’ $20 billion in revenue), adidas is believed to have brought in approximately $500 million in soccer-related revenues above Nike in 2013. Nike keeps inching closer to adidas in soccer, a sector of sport historically set aside for adidas to conquer. Thus, it is truly all in or nothing for adidas.
With Germany matching up against Brazil and Argentina playing the Netherlands, there could be an all-adidas Final on July 13. It would be a major coup for adidas, which sponsored nine of the thirty-two teams originally competing in the 2014 World Cup, compared to Nike’s leading ten sponsorships. It is not at all surprising that Germany and Argentina are among the best sellers (there were more than two million Germany jerseys sold by June 24); however, that adds significance to the importance of their success in the Semi-final round.
Nike may promote that it has risked everything with the World Cup, but the statement has more significance when applied to adidas. The brand has manufactured every soccer ball used in the World Cup since 1970 and recently extended its partnership with FIFA to last through 2030 at a reported $70 million for every four years to maintain the relationship. It is the company behind “brazuca”, the official match ball of the 2014 World Cup in Brazil, which was tested for two-and-a-half years by more than 600 of the world’s top players before being introduced to the public in December 2013.
Here you can see Messi impressed with my moves. #ballin #ARG pic.twitter.com/01mVVb0u2L
— brazuca (@brazuca) July 5, 2014
Adidas also spends significant money in the sponsorship of important players on both Argentina and Germany. It markets a Lionel Messi signature collection of footwear and apparel, including a new signature cleat, and also sponsors German footballer Bastian Schweinsteiger. Messi reportedly earns $3.34 million per year from his deal with adidas. Partnerships with individual players are not reserved to those who serve on teams sponsored by adidas. The brand also has deals in place with Netherlands stars Robin Van Persie and Arjen Robben.
Argentina has been associated with adidas since 1974 and a 2011 contract ensures that their partnership will last at least through December 2022. The extension has an annual value of $11 million. It is believed that adidas is paying $37 million per year to sponsor Germany.
Adidas is the global leader in soccer. It is determined to sustain the status quo. At this stage of the 2014 World Cup, the phrase “all in or nothing” has garnered added significance. Adidas has spent millions of dollars to capture the attention of the world. A victory by Argentina or Germany will add a major reward for the brand that continues to truly risk everything on the sport of soccer.
Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.
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