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Volume 6 No. 197

Marketing and Sponsorship

Adidas is "primed to sign a 10-year deal" to supply ManU’s kit worth in the region of £750M ($1.3B) after rival Nike "declined to match the German company’s offer," according to Roger Blitz of the FINANCIAL TIMES. Months of talks between Nike and ManU to extend its 13-year kit deal ended with a statement from Nike saying the terms on offer “did not represent good value for Nike’s shareholders” and that its relationship "would end after next season." Nike "was given a period of exclusivity to extend the deal, but when this expired United approached rival companies." Nike still "had the right to match any competing offer but has now decided not to exercise that option." ManU "declined to comment" and adidas "did not return calls." People with knowledge of the situation said that they "expect" the new contract to be worth around £75M ($128M) a year. The size of the deal "underlines the fight for supremacy between Nike and Adidas in football, graphically played out at the World Cup in Brazil" (FT, 7/8). In N.Y., Sara Germano reported the potential deal "is the latest move" by adidas to "regain some ground from Nike." In adidas' home region of Western Europe, net sales were flat at €1.1B for the quarter ended March 31, while Nike posted a 25% jump to $1.3B in the region for the quarter ended May 31. Warrior Sports, a subsidiary of New Balance Athletic Shoe, "also has expressed interest in sponsoring the team, which has an avid and global fan base despite its tough year" (WALL STREET JOURNAL, 7/8). FORBES' Mike Ozanian reported it is likely that the rejection of the deal by Nike "signals a market top for kit deals, rather than being a reflection of the soccer team’s struggles on the pitch." Bloomberg reported that Nike "doesn’t see value in the price United is seeking" (FORBES, 7/8).

Russian Parliament's passage of a law to allow beer commercials during sports broadcasts is expected to pump fresh revenue into the country's sports business. Some experts, though, say the impact from the measure might not be significant. The move ends a two-year ban on all alcohol commercials. Duma Deputy Igor Zotov, who initiated the legislation, said, "I'd like to believe that thanks to extra cash coming in we'll see a totally different performance from our football squad, as well as improvements in other sports." The legislation was hastily passed in the wake of Russia's poor showing in the World Cup, where it failed to win a single match, and did not qualify for the knockout stage. With Russia hosting the next World Cup, many officials in Russia are concerned about the national squad's performance.

THE MONEY TRAIL: Beer companies could spend an extra 5B rubles ($145M) on TV commercials over the next four years, Vadim Drobiz, head of the center for research into the federal and regional liquor markets, told SBD Global. However, he added, that amount is unlikely to make a big difference. Drobiz said, "You need to keep in mind that 10% of that amount will be spent on production of commercials, and one half of the remainder will be paid to TV networks. And what is left isn't much. This is a purely political steps aimed at showing FIFA and its beer sponsors that everything will be fine with the World Cup in Russia. While the ban has been in place, Russia's national football squad has often chosen to play friendlies abroad so that liquor ads could be placed at the stadium and the football federation could cash in."
Vladimir Kozlov is a writer in Moscow.

The Asia-Pacific golf equipment and apparels market generated revenue worth $4B in '13, according to Ken Research's recent Asia-Pacific golf industry market outlook. The report said that the region has a 19% share in the overall golf facilities in the world, and is expected to increase in the next five years. The rising golf population in China, now at 1 million, contributed to the significant growth. The research also revealed that the Japan golf industry is expected to generate revenue of $14B by '18 (Ken Research).

Australian tennis player Nick Kyrgios' manager has been "sifting through" sponsorship offers from companies keen to cash in on the "Wimbledon world-beater," according to Fleta Page of the CANBERRA TIMES. U.K.-based John Morris returned to Canberra with Kyrgios on Sunday to "navigate the influx of offers after his young charge rose to world prominence, beating world No.1 Rafael Nadal on Wimbledon's centre court." Cars, watches and drink brands "are all keen for the 19-year-old to spruik their goods, but he isn't looking to cash in just yet, and Morris is taking a discerning approach to his young charge." Morris said, "We're not looking for short term gimmicks ... we're looking for partnerships with people looking to come on board and be part of the Nick Kyrgios brand and the Nick Kyrgios journey." Adding to the flood of offers is Kyrgios' "big on-court personality and his grounded family life which make him so marketable." Morris: "If you look at Nick on the court, he's a showman, he's charismatic, he's entertaining, exciting, he plays high-risk tennis and he's got this nickname of 'Wild Thing' and he's got this edgy look and he's very aggressive on the court. But off the court ... he's very grounded, very humble, very much a home bird" (CANBERRA TIMES, 7/8).

Al Watan has launched a cross-media campaign with Argentina footballer Lionel Messi powered by Rewardisement technology from KnowledgeView to run through the World Cup and Ramadan. Ooredoo's "Simply Do Wonders" campaign features a Rewardisement engaging video where the audience gets rewarded for its engagement with the ad. The campaign is making its debut across Asia, the Middle East and North Africa. It is supported by a social media campaign, "Simply Do Wonders," which encourages young people to upload videos of their football "street skills" to an Instagram account with the hashtag #MeetMessi. KnowledgeView CEO Ali Al Assam: "The new campaign marks the beginning of a new advertising age where technology is helping to reach audience on all platforms seamlessly and engage them with rewarding activities. We are proud to be part of this campaign and helping in bridging the gap between print and digital through LiveBridge and Rewardisement solutions" (KnowledgeView).

Second Bundesliga side Fortuna Dusseldorf has signed a new premium partnership with mobile payment system kesh. The subsidiary of biw Bank will offer its service at the club's official fan shop starting with the '14-15 season. The deal was brokered by Fortuna's marketing partner Infront Sports & Media (Fortuna Dusseldorf). ... La Liga side Rayo Vallecano on Tuesday signed a partnership with China-based NJQY Sports Management, which will become the club's principal shirt sponsor. Rayo Vallecano's President Raúl Martín Presa, Sporting Dir Felipe Miñambres and Legal Services Dir Gema Barrasa attended the signing of the deal, which took place in Nanjing, China (AS, 7/8). ... Handball Bundesliga (HBL) club MT Melsungen has agreed to a deal with beverage producer RhönSprudel to become its new co-sponsor. The partnership will run until June 30 (MT Melsungen). ... Organizers of the FIA Formula E Championship announced a partnership with the Prince Albert II of Monaco Foundation to support the foundation's environmental actions and raise funds for future projects. The foundation is dedicated to protecting the environment and promoting sustainable development (Formula E). ... A-League side Adelaide United has appointed Cummins&Partners as its strategic and creative agency. Cummins&Partners' other clients include Nike, Tennis Australia and the Australian Football League Players' Association. Adelaide Dir Bruno Marveggio said that the appointment presented a "perfect opportunity to refresh and revitalise the Adelaide United brand" (AD NEWS, 7/7). ... Super Rugby side Melbourne Rebels and agricultural equipment manufacturer Massey Ferguson announced the extension of their partnership through the '16 Super Rugby season. Massey Ferguson is a Platinum Partner of the Rebels (Melbourne Rebels). ... The ABA League (Adriatic League) started a cooperation with auditor Deloitte (ABA Liga). ... Samsung has agreed to become the official technological partner of Trek Bicycle and its Int'l Cycling Union ProTour cycling team Trek Factory Racing through '15. The team's riders will wear the Samsung logo. Financial details were not disclosed (Trek).