PtG Article 06.07.2010

The sportswear company World Cup

The pensioner was talking himself into a rage. “Football is becoming too commercialized”, he scolded. “The young people today are too focused on money”. In his time, Eusébio da Silva Ferreira argues, everything was better. Back then, you focused on the game.

Eusébio, born in 1942 in Mozambique, was a top scorer for Portugal in the 1966 World Cup in England where he scored nine goals. His legitimate successor, the current top scorer of the 2010 tournament, is Spain’s David Villa (5 goals). For two of the runners up, Argentina’s Gonzalo Higuain (4 goals) and Slovakia’s Robert Vittek (4 goals), the tournament has ended. What also unites the old hero Eusébio and the current stars is that they are all marketed by Adidas as advertising figures. So towards who was Eusébio’s criticism directed? Hardly towards professionals from their own stable? For Adidas, it is currently going very well. The cancellation by the injured Michael Ballack, one of Adidas’ advertising figures, was easily compensated. Other advertising figures such as David Villa or Bastian Schweinsteiger could well be voted best player of the tournament, and Thomas Mueller has a real chance at the title of best young player. Sponsored teamsStatistics say that half of all the goals are scored in Adidas shoes. In the quarterfinals, Adidas were represented with four teams (Germany, Argentina, Spain and Paraguay) and thus now have two teams in the semifinals. The other semi-final will be between Nike (Netherlands) and Puma (Uruguay). This was the situation at the start of the World Cup:

  • Adidas (12 teams): Germany, Spain, South Africa, Argentina, France, Denmark, Japan, Mexico, Greece, Slovakia, Paraguay and Nigeria
  • Nike (10 teams, including the subsidiary Umbro): Brazil, Netherlands, Portugal, Australia, Serbia, USA, South Korea, Slovenia and New Zealand. Plus England (Umbro)
  • Puma (7 teams): Ghana, Cameroon, Algeria, Ivory Coast, Switzerland, Uruguay and Italy
  • Brooks (1 team): Chile
  • Legea (1 team): North Korea
  • Joma (1 team): Honduras

For Adidas, the football World Cup matches are always home games. Adidas has been a sponsor of FIFA for years and has traditionally been in league with FIFA: in the mid seventies Sepp Blatter who was then FIFA-Director was even paid by Adidas. Executive member Franz Beckenbauer was then, as he is now, an important advertisement figure for Adidas. Moreover, the company always enjoys exclusive rights, delivers the World Cup ball, and equips the referees. Across from the FIFA headquarters, Adidas has even rented an exhibition hall to show off legends such as Eusébio. For Puma, the unequal brother from the city of Herzogenaurach in Germany (where also Adidas has its headquarters), the tournament is also a kind of home game. Puma CEO Jochen Zeitz owns a farm in Kenya, and the marketing strategy of Puma’s football division is focused entirely on Africa. Even the company logo, a puma, is replaced with a map of Africa.Three of the four African teams sponsored by Puma, however, didn’t progress from the group stages. Nike can currently only put its name down for dubious results, although they are sponsoring only two World Cup teams less than Adidas and will, in the future, be equipping the French and the South African teams. But both of these teams were among the most disappointing at this year’s World Cup. Nike writes the futureActually, Nike had a brilliant World Cup opener, because of the World Cup spot "Write the Future" produced by Oscar-winner Alejandro González Iñárritu, which has been widely praised. NIKE Football - Write the Future on YouTube The video has so far been viewed on Youtube more than 18 million times. From Adidas comes an ad featuring the retired star Zinedine Zidane, which, in comparison, seems very ordinary:ADIDAS Football - The Quest on YouTubeTo make it complete, here is Puma’s "Journey of Football":PUMA - Journey of Football on YouTubeBad luck for NikeHowever, the success of the Iñárritu-Nike video was put into reflection after the first weeks of the tournament. Early on, the supposed success of Nike and its viral marketing through social media was widely discussed and praised. However, now, as the World Cup is entering its final phase and the sporting performances are added up, everything is reversed. "Write the Future"? People are now instead laughing at Nike.Seven professionals were used for Alejandro González Iñárritu’s three-minute spot. One did not get a seat in the final World Cup squad (Brazil's former World Footballer Ronaldinho). Five others experienced sporting disasters during the World Cup: Didier Drogba in moderation, but especially Franck Ribery, Wayne Rooney, Cristiano Ronaldo and Fabio Cannavaro, who was a defending champion and winner of the 2006 FIFA World Player of the Year Award. Of the seven Nike heroes, only Robinho managed to make it into the quarter-finals – where he and his team lost. Nike VS AdidasAt the beginning of the World Cup, market research company Nielsen presented an analysis based on an analysis of online blogs, message boards and social networking sites where they found that Nike was more frequently linked to the World Cup than any of the tournament’s official partners and sponsors. Adidas CEO Herbert Hainer countered that during the preliminary round with an optimistic sales forecast: Instead of a turnover of 1.3 billion euro from their football division, which would account for about one-seventh of the total net revenue, Adidas has raised its expectation for 2010 to 1.5 billion. Adidas will thus again this year lie narrowly before Nike with regards to revenue in the business area of football. The Americans remain the world's number one overall with a turnover of 13 billion, compared to Adidas with a turnover of 11 billion. In the meantime, a new Nielsen report shows that Adidas, since the start of the opening kickoff, has reasserted itself at the top of World Cup brand dialogue – just in front of ambusher Nike. One trend is clear. As the sales in sportswear companies’ football divisions rise in World Cup years, the stock market reacts only moderately, and not with the fireworks that the analysts and industry predict. The historical truth is: during the World Cup years of 1998, 2002 and 2006 the prices of Adidas and Nike shares stagnated or declined. Puma, however, has since 2002 always been able to profit due to the orientation as a lifestyle brand. Football meets lifestylePuma brought their football division a lot of publicity with some much-discussed outfits. In 2002, Cameroon sported sleeveless shirts and two years later at the African Cup of Nations they played in one-piece suits. Parallel to this lifestyle orientation, however, the Cameroonians’ sports performances have become steadily weaker. Despite individual talents, the team’s performances have been only second-rate. They did not manage to qualify for the World Cup in 2006 and in their last three World Cups they did not manage to progress from the group stages, and have only won one out of nine games. This is the other side of the coin, which the corporations are not too happy to talk about.Football meets lifestyle. Jerseys are worn by people on the streets. This benefits all of the sportswear companies. Adidas alone has in 2010 sold more than twice as many replica shirts (6.5 million) than in the 2006 World Cup year. Football is still a growth market for the equipment supplier, while it is much harder to make a profit from the Olympic Games. The reason for this is simple, said Adidas boss Herbert Hainer recently in the magazine "Capital":  "Who wants to buy the jersey of a cross-country skier or a hammer thrower?”.


The original article can be found in German on Jens Weinreich's blog where it was posted on 2 July 2010.