The Shootout Nike aims to use the Brazil World Cup to shatter Adidas’s football supremacy
On a cross from Fabió Coentrão, Karim Benzema, with a single touch, puts the ball in the net. It’s the only goal of the night, but it’s beautiful, and with it Real Madrid winsatitshomestadium,theSantiago Bernabéu. Benzema wears Adidas boots. 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 a semifinal at 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.
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. And his target is still the same.
That one goal at the Bernabéu started with a Nike shoe on the right foot of Cristiano Ronaldo, who fed Coentrão with a threaded pass from midfield.
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Nike is now the largest sportswear company in the world, with $25 billion in revenue and a 17% market share. The second-largest, Germany-based Adidas, has $20 billion in revenue and 12% of the market. These share numbers soar for football gear, where the two comprise 70% of the market.
According to FIFA, 300 million people play football and a billion watch it. The sport is expanding in Asia and is the rare product for which the US is still a growing market.
Nike says it brought in $1.9 billion in football 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 football revenue. That this is even a contest is a problem for Adidas. Nike didn’t do football until 1994, when the World Cup came to the US. And even when Adidas lost its advantage in other sports, it held on to it in football. 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 football is the only sport that matters. Nike wants football. 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.
On June 12 in São Paulo, Brazil will play Croatia in the first game of the World Cup. The corporate spend on teamsponsorshipsalone,accordingto 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. (The ball this time will be called “brazuca,” after a Portuguese slang term for Brazilians.)
During Cup years, Nike has become adept at running something else: ads that imply a global football event without uttering “FIFA World Cup.” Nike is so good at advertising and event promotion that it sometimes seems as if no other company is playing the same game. Adidas maintains an overwhelming advantage at the only global tournament, and it makes more money in the sport. But Nike is drawing its only real rival into an old and expensive game: sponsor as many of the best teams and players as possible.
“The No.1 football boot brand in the world, that’s what we are today,” says Trevor Edwards, head of brand management for Nike, “including Germany.” When Edwards says “Germany,” he means Adidas.
In a basement at an Adidas building in the Ger man town of Herzogenaurach, mechanical feet never tire of kicking goals and stomping boots. A sad robot named Newton walks and sweats in a climate-controlled enclosure. This is where Matthias Mecking and Antonio Zea, heads of soccer marketing and soccer innovation, respectively, come up with boots “silos.” Silos are shoes dedicated not to players but to player styles. It’s how both Nike and Adidas approach football boots. It’s risky to make shoes that are branded around a single player. Athletes can fade unexpectedly or have a catastrophic World Cup summer. The companies pick their players, move them into a line of boots, then move new players up the same line as they arrive. Messi, the greatest of what Adidas calls its “assets,” has his own colour scheme at Adidas, his own M logo. But there is no Messi shoe. He wears a version of the F50, a light shoe designed for fast players. Adidas is counting on Messi’s style of play this summer. On the wall of the Adidas store at Nuremberg, near Herzogenaurach, there are two quotes: one from Messi and one from Adi Dassler. Herzogenaurach is where Adolf “Adi” Dassler — adi das — started making sports shoes in the 1920s. Adidas is still based there. Adidas’s company mythology is built around Adi: the cobbler, talking to athletes and making boots, just like Zea and Mecking do today. It was Adi’s son Horst, though, who had the falling-apple moment in sports marketing when he realised in 1956 that he could get Olympians to wear Adidas shoes if he just gave them away. Horst also was the first to understand that the event itself could be for sale. He created Adidas’s enduring relationship with FIFA. What does success look like for Adidas in 2014? “Germany winning the World Cup,” says Markus Baumann, company’s head of soccer. Meanwhile, Nike’s new ad of Ronaldoshowswhat thecompanyhas always done best: owning an event without ever having to pay for it. “The players from Nike have a lot of entertainment character,” says Rohlmann. “Messi, sponsored by Adidas, he’s more a football kicker.” Adidas backs athletes. Nike backs athletic celebrities. Bloomberg Businessweek