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SBD Global/November 22, 2013/Marketing and Sponsorship

FIFA, Adidas Extend Longstanding World Cup Sponsorship Through 2030

FIFA and adidas formally announced an extension of their long-term sponsorship deal that gives the apparel maker official partner, supplier and licensee rights for the World Cup and all FIFA events through '30. Also, adidas will continue to supply the official match ball of the FIFA World Cup and provide uniforms for event volunteers. The agreement includes similar rights at the Women's World Cup and U20 World Cup. The two entities have had a partnership since '70 (adidas). The FIFA/adidas partnership includes adidas supporting initiatives such as the FIFA Goal and FIFA Football for Hope adidas Exchange Programme (FIFA). REUTERS' Victoria Bryan reported the last contract extension with FIFA was announced in '05, covering the 2010 World Cup and the 2014 Brazil World Cup. That deal "was estimated to be worth" $350M. Adidas and Nike are "almost neck and neck" in the market for football kit -- replica shirts, balls and boots -- estimated to be worth around €5B ($6.7B) annually (REUTERS, 11/21). The AP reported the value "was not disclosed," though FIFA top-tier sponsorships are currently estimated at about $100M per four-year World Cup cycle. Adidas is among six top-tier FIFA World Cup partners. Coca-Cola and Hyundai "previously extended their deals" through '22. Second-tier sponsor Budweiser is "also signed until then" (AP, 11/21).

MONEY MAKER: In N.Y., Nicky Redl reported the group posted lower third-quarter earnings and is expecting the 2014 World Cup to "boost sales" of football-related products. Adidas CEO Herbert Hainer said earlier this month, "Momentum will clearly return to our business in the fourth quarter and beyond" (WALL STREET JOURNAL, 11/21). BLOOMBERG's Tariq Panja reported the World Cup "is responsible" for more than 90% of FIFA’s income, which last year topped $1.1B, including about $350M from World Cup-related sponsorship. The contract extension comes six months after FIFA President Sepp Blatter said his organization had “emerged from troubled waters” following a reform program it was forced to embark on. Corruption allegations against several high-ranking FIFA officials "led to calls for change from stakeholders including sponsors" such as adidas. Hainer said, "It was a natural step for us to extend one of the most successful partnerships in the history of sports marketing" (BLOOMBERG, 11/21).
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