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Volume 6 No. 214

Marketing and Sponsorship

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).

When Liverpool CCO Billy Hogan attends his daughter’s football practices near his Boston home, he notices a new, interesting trend. Nearly half of these grade-school players are wearing jerseys of int’l football clubs. Hogan: “That’s something you didn’t see 10 to 15 years ago.” What it illustrates to Hogan is the growing global brand presence of Premier League teams. Hogan, who was promoted from Fenway Sports Management managing director to his current job in May ’12, has a big stake in such matters these days. Hogan now oversees Liverpool’s commercial activity and global growth. And like many Premier League clubs, Liverpool is experiencing a global fan base surge keyed by global sponsorships, preseason tours and social media savvy. Hogan: “While it’s our focus to increase the fan base, what we’ve tried to do the last couple years is to strengthen that connection with the fan base. We’ve done a lot as it relates to social and digital media.” Just this week, for instance, Liverpool announced it will launch a Chinese language website to communicate with its estimated 170 million fans in the country. According to marketing agency ZenithOptimedia, Liverpool is the eighth most-followed global franchise on Facebook and sixth on Twitter. Hogan said the focus for Liverpool is not just to attract fans, it is to communicate with them. Liverpool has 17 localized Twitter feeds and local language websites in Indonesia, Thailand and, now, China. Hogan: “This allows our fans, no matter what language they speak, to follow our club. No matter where you live, you’re going to have a different take on the club. If you live in Liverpool, you’re going to have a different take on the club than if you live in Jakarta.”

GLOBAL PRESENCE: Liverpool has continued its global expansion this year in the form of football academies. The club announced recently that it will open a new coaching complex in China and a football academy in India. Hogan: “From our perspective, it makes sense to have a presence there. In this case, it’s about supporting the development of the game in those markets. This isn’t about developing the next Premier League player in those markets. It’s being able to impact the development of the game.” Interest in Liverpool in those regions is strong. This was evidenced last summer when Liverpool embarked on a preseason tour played in front of overflow crowds in Indonesia, Australia and Thailand. The tour attracted more than 300,000 fans, including a sold-out crowd of 95,000 at the Melbourne Cricket Ground. While the preseason friendlies are not major revenue drivers, according to Hogan, selling merchandise in those regions is. To help keep costs lower for fans in those regions, Liverpool recently opened int’l merchandise distribution centers in places such as the Middle East, Thailand and Vietnam.

BACK IN THE U.S.: While Liverpool focuses on growing and communicating with fans in Asia and the Middle East, another key market is also a focus for the club -- the U.S. Liverpool has a distinct advantage in the U.S. given that it is the home of owners Fenway Sports Group. The Premier League’s $250M deal with NBC has also facilitated the exposure of the club to potential U.S. fans. The growing interest of the league in the U.S. has also been flanked by several major U.S. sponsors teaming up with Liverpool, including Chevrolet, Lumber Liquidators and Stanley Tools. Hogan: “A lot of those conversations here with the U.S. brands are starting to get some traction. It’s exciting to see some of those U.S. brands getting involved in the sport.” For Hogan, who splits time between his home in Boston and job in the U.K., this is something he sees firsthand. Hogan: “I would say the U.S. is definitely an emerging market in football.”

Pepsi has apologized to Cristiano Ronaldo after posting "bizarre pictures on their official Facebook page in Sweden of the Portugal forward as a voodoo doll in various forms of distress," according to James Orr of the London INDEPENDENT. The "viral ads were posted on the day of the second-leg of the World Cup qualifying play-off between the two sides, but the black magic had no ill effect on Ronaldo, quite the opposite in fact" -- he scored a hat trick as Portugal won 3-2. Pepsi has offered its "sincerest apology" to the player, "after three images showed the doll -- in red Portugal kit complete with visible No 7. -- being tied to a train track, having its head crushed by a can of Pepsi and being spiked by needles." Under the train track picture was the "regretful caption: 'We're going to pass over Portugal'" (INDEPENDENT, 11/21). In London, John Drayton wrote the ads "sparked outrage" in Ronaldo's homeland, with a Facebook page titled "I'll Never Drink Pepsi Again" getting 115,000 likes. Pepsi is "a major sponsor of Ronaldo's Barcelona rival, Lionel Messi" (DAILY MAIL, 11/21).

German Athletics Marketing (DLM), the marketing agency of the German Athletics Federation (DLV), has reached a deal with Schmidt Media as the official media and technology partner of the DLV clubs. The cooperation will run through '18 (DLV). ... The German Basketball Federation (DBB) has signed a deal with printing company CEWE-PRINT as the federation's official print partner. The deal will run through June 30 (DBB). ... Qatar FA President Sheikh Hamad bin Khalifa bin Ahmed Al Thani and Aamal Chair Sheikh Faisal bin Qassim Al Thani "signed a partnership agreement by which Aamal will sponsor the National A men’s team, Emir Cup, Sheikh Jassim Cup, Qatar Gas League and Qatar Futsal League" for the '13-14 season (THE PENINSULA, 11/21). ... Australian Football League side Western Bulldogs announced White King as its ball partner for the next two years (Western Bulldogs).