Can Nike Beat Adidas at Soccer?


Infinite Profit


On a cross from Fabió Coentrão, Karim Benzema, with a single touch, puts the ball in the right place. It’s the only goal of the night, but it’s beautiful, and with it Real Madrid wins at its home stadium, the Santiago Bernabéu.

Benzema wears Adidas cleats. So does Coentrão. Real Madrid wears Adidas jerseys. So does Bayern Munich, the other team. The two clubs, among the best in the world, are playing in a semifinal match for the Champions League. Adidas sponsors the league, which gives it the right to supply the ball and put its name on the field. Team, team, field, ball, assist, goal: a good night for Adidas at the Bernabéu.

This is what Adidas has been doing for 66 years. The company helped invent the practice of paying athletes to wear its shoes, paying teams to wear its jerseys, and paying a league to use its ball. In the 1970s the company was so dominant that a man named Phil Knight, selling Japanese track shoes in Oregon, set Adidas as his target. It seemed absurd at the time.

Knight is now the chairman of the board at Nike. That one goal at the Bernabéu started with a Nike cleat on the right foot of Cristiano Ronaldo, who fed Coentrão with a threaded pass from midfield. I’m at the stadium because Nike offered me tickets. And I’m in Spain because after several requests to speak to executives in Oregon, Nike insisted I meet them here in Madrid.

Nike has rented out the 380-year-old Salón de Reinos, the slightly shabby remains of a palace built by Philip IV. For two days, Nike has parked generators outside and installed stage sets inside. In 2013, Ronaldo won the Ballon d’Or, the golden ball. This makes him the best player in the world. Nike invited 250 journalists from around the globe to Madrid because it wants us to see Ronaldo’s new shoes.

Nike is now the largest sportswear company in the world, with $25 billion in revenue and a 17 percent market share. The second-largest, Germany-based Adidas, has $20 billion in revenue and 12 percent of the market. These share numbers soar for soccer gear, where together the two comprise 70 percent of the market. According to FIFA, the organization that governs international soccer, 300 million people play the game and a billion watch it. The sport is expanding in Asia and is the rare product for which the U.S. is still a growing market. Smaller American sportswear providers such as Under Armour and Warrior Sports have begun sponsoring teams in the U.K.’s Barclays Premier League, recognizing that a company without a cleat on this turf cannot aspire to be global.

Nike says it brought in $1.9 billion in soccer revenue in 2013. Adidas declined to share its number, but according to Peter Rohlmann, a sports marketing consultant based in Rheine, last year the company had $2.4 billion in soccer revenue. That this is even a contest is a problem for Adidas. Nike didn’t do soccer until 1994, when the World Cup came to the U.S. And even when Adidas lost its advantage in other sports, it held on to it in soccer. Herbert Hainer, the company’s CEO, likes to say that the game is “part of our DNA.” Adidas relies more on the European market, where soccer is the only sport that matters. Nike wants soccer. Adidas needs it.

Since 1970, Adidas has sponsored FIFA. Last year it extended that agreement to 2030; according to Rohlmann, this costs the company almost $70 million for every four-year cycle. For slightly less than that, Adidas also sponsors UEFA, which runs international soccer in Europe. The sport makes up a larger part of overall revenue for Adidas than it does for Nike, and Adidas’s sales jump in “event years,” as in 2010, when the last FIFA World Cup was played in South Africa.

On June 12 in São Paulo, Brazil will play Croatia in the first game of this year’s World Cup. The corporate spend on team sponsorships alone, according to Ohlmann, will total almost $400 million. Nike will sponsor 10 national teams, more than it ever has before—and one more than Adidas. Nike has Brazil, Portugal, and Ronaldo. Adidas has Spain, Germany, and Lionel Messi, the Argentine who has won the Ballon d’Or four times. As in every World Cup since 1970, the ball on the field will be Adidas’s.

Brendan Greeley


Filed under: Marketing News

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