Friday, November 22, 2024
Business

Adidas was blind-sided by Germany's national football team choosing Nike as sponsor

It, therefore, marks an unusual day in Germany as the country’s soccer federation (DFB) inked a surprise deal with American supplier Nike, ending its decades-long partnership with local stalwart Adidas after a remarkable 77-year tenure on Thursday.

The move to give Adidas’s rival its prestigious, long-cherished business caught even the German sportswear maker off guard. 

An Adidas spokesperson told Fortune in a statement: “We were informed by the DFB yesterday that the federation will have a new supplier from 2027 onwards.” 

First forged in the 1950s, DFB’s partnership with Adidas is tied to a lot of legacy. The sports company has sponsored the DFB’s gear through some of the national soccer team’s most iconic moments, including at four men’s World Cups, two women’s World Cups and numerous European titles. 

While DFB may have found itself a good deal with Nike—which is set to kick off in 2027—Adidas might be the lone loser. The company has had a rocky few years navigating the fallout of its partnership with rapper Kanye West and his lucrative Yeezy sneaker line. It’s cost the company millions in lost revenue, and is still weighing heavy on the brand as it marches into a new year. The company’s CEO Bjorn Gulden has been trying to shake off the impact of Yeezy’s discontinuation by doubling down on some of Adidas’s other sought-after models.

Adidas declined to comment on the financial impact of losing the DFB deal.    

On the bright side, Adidas still makes jerseys for Italy and Spain, so it won’t be completely out of sight for soccer enthusiasts. Nike, in the meanwhile, already sponsors kits for several other national teams, including France and England. Its new agreement with DFB will last till 2034.    

The German jersey without three strips

The breakup, it turns out, was due to financial reasons as DFB defended its decision to pick the American company instead. 

“The DFB has to make economic decisions against this background. Nike made by far the best financial offer in the transparent and non-discriminatory tender process,” DFB said in a post on X

The association acknowledged that it was a “drastic event” given “a partnership that was and is characterized by many special moments is coming to an end after more than 70 years.”

It added that its top-most priority was the development of soccer in Germany—that meant investing in the future of the sport for the 24,000-plus clubs and 2.2 million players it’s responsible for. 

DFB’s Nike deal promised “a financially stable future again,” as DFB’s treasurer Stephan Grunwald put it in a statement. It’s unclear what Adidas’s terms were, but it fell short compared to its American challenger. 

Dropping Adidas will mark a significant change—not just for the association or the sportswear company, but also for viewers. 

Just consider the German economic minister Robert Habeck’s comments to local newswire DPA—he said he could “hardly imagine the German jersey without the three stripes” as it was “a piece of German identity.” 

Habeck also said he hoped there was some “hometown loyalty” in DFB’s choice of kit sponsor—indeed Adidas wished it was the same.

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