Adidas, the IAAF's biggest sponsor, has told athletics' world governing body "it is to terminate their sponsorship deal four years early," according to Daly & Roan of the BBC. The sportswear company informed the IAAF of its decision -- "understood to be a direct result of the doping scandal sweeping the sport" -- last week. Sources say that "the move will cost the IAAF and its commercial partner Dentsu tens of millions of dollars in revenue." It is "sure to come as a major blow" for IAAF President Sebastian Coe. Neither adidas nor the IAAF "confirmed the split but both issued short statements." They both referenced the "reform process" underway as the IAAF attempts to come to terms with a number of damaging revelations. They also said that they were "in close contact" with each other, with the IAAF insisting it was in close contact with "all its sponsors and partners." The 11-year sponsorship deal with adidas was "due to run until" '19 and was reportedly worth $33M. However, sources have said that the figure is "much higher," -- as much, in terms of cash and product, as about $8M per year. This "means the projected lost revenue for the IAAF and its agency Dentsu over the next four years" will be more than $30M. Olympic Gold Medalist Darren Campbell said that the news adidas was ending its sponsorship deal early "would have a major impact on the sport." He said, "It's one thing to say we won't be renewing our contract after 2019 but to actually terminate your contract now, seven, eight months before the start of the Olympic Games, this is huge." Sports finance expert Rob Wilson said that athletics is "perhaps not as important as it once was" to adidas. Wilson said, "As one of the largest kit suppliers in the world, sponsorship is vital to adidas. However, it is fair to say the impact of athletics sponsorship is declining and they are moving toward football as a more important area of growth." It is not clear if the IAAF will challenge the decision in court, although lawyers at adidas "are understood to be preparing for such a move" (BBC, 1/24).
NO CONFIRMATION: REUTERS' Mitch Phillips reported neither adidas or the IAAF "were willing to confirm the report," when asked. Adidas would only repeat its "standard line" about the IAAF scandal, saying, "Adidas has a clear anti-doping policy in place. Therefore, we are in close contact with the IAAF to learn more about their reform process" (REUTERS, 1/25). In London, Ben Rumsby wrote a departure for adidas would "remove whatever doubts remain about the seriousness of the scandal to have engulfed the sport." The company remains a major sponsor of FIFA, "despite the rampant corruption that has been exposed at football's world governing body." But the blackmail that "resulted in drugs cheats continuing to compete at the Olympics in London -- masterminded by some of the most powerful people in athletics -- was widely regarded as being on a whole other level." IAAF council member Geoff Gardner told Radio Four's Today program: "If they choose, for whatever reason, to not continue the arrangement with the IAAF, I would think that it won’t be too long before others do come out of the woodwork wanting to have their emblems emblazoned upon the chest of Olympic and world champion athletes around the world." Refusing to "rule out an attempt to woo Nike" as a replacement, he added, "I don't think there's any argument that we find ourselves in a very difficult situation. At the end of the day, I think that the roadmap that president Coe has outlined will ensure that the IAAF will regain its position as the number one Olympic sport. I’d think you’d have to be a little naïve to suggest that the world’s biggest apparel producers aren’t going to be falling over themselves to want to have part of that action going forward" (TELEGRAPH, 1/25).
'FAR FROM SUNNY': MARKETING MAGAZINE's Ben Bold reported adidas' worldwide sponsorship rights for all IAAF Athletics Series "were set to run" until '19. London School of Marketing faculty member Jacques de Cock claims that "the outlook is far from sunny for IAAF." He said, "This news is likely to further undermine the IAAF as a worthwhile vehicle for sponsorship. It currently has very limited sponsors, the major ones, up until now being adidas, Canon, Seiko, TDK and Toyota." For IMR Editor Simon Rines, adidas's decision is "a mark of how seriously the brand takes the allegations." Rines said, "The company clearly feels that a continued association would be damaging and that its money would be better spent elsewhere." He points out that adidas "would probably have had a morality clause in place, meaning that it could terminate the contract if the IAAF was deemed to be acting in a way that could damage the brand" (MARKETING MAGAZINE, 1/25). In London, Tom Peck wrote for the IAAF, this "is extremely serious." It "is not a rich organisation." Adidas is "a longstanding partner." In the past, "part of its problem with doping has been blamed on the sheer fact that it does not have the cash to properly police it." It is an expensive business, and "the cheats have more cash than they do." We "now know that its highest officials were not only failing to solve the problem, but personally enriching themselves to cover it up." One of the arguments "constantly put about by big sponsors of sporting events, when they are asked to speak up or take action in the wake of corruption allegations, is that if they pull out, their rivals will merely step in." That "is a reality that probably does not apply here." The likelihood of Nike racing to take adidas’s place "is extremely low," not least as Coe has been "very reluctantly forced to end his agreement with them" (INDEPENDENT, 1/25).
