Adidas has reached an agreement with the German Football Federation (DFB) to continue outfitting the German national squad with three-striped apparel until the end of 2018. Much to the dismay of some German clubs, the value of the new deal is much lower than a supposed knock-out offer tabled by Nike earlier this year, but like Nike’s proposal, it includes several commitments by Adidas to help develop the sport in Germany.
The DFB’s potential switch to Nike caused a furor in Germany, where the national team has been linked with the Three Stripes for more than 50 years. Unlike sponsorship deals in nearly all other football markets, the partnership has long dictated that German players should wear Adidas shirts as well as footwear. However, frictions arose between Adidas and the German team just weeks after the 2006 World Cup, when players under personal contracts with Nike complained that they could not be expected to wear three-striped boots in the national team.
Adidas and the federation then struck a compromise to exclude footwear in the future, but they disagreed on other terms of the contract. While Adidas believed that it amounted to an extension of its decades-old deal with the DFB until at least 2014, the federation was adamant that the partnership was running out at the end of 2010.
In the meantime, Nike had tabled an exorbitant offer for the rights worth a reported €500 million for 10 years, paired with a one-off signing fee of €100 million – a huge increase compared with the reported €11 million that Adidas had originally agreed to pay annually until 2011. A 3-man arbitration committee advised Adidas and the DFB earlier this month to seek a settlement.
Nike’s purported offer still looks set to benefit the DFB since it reportedly prompted Adidas to raise its own proposed deal to €22 million annually from 2011 and to add other forms of partnership. According to another report, the annual investment would rise from €11 million to €20 million from 2011 to 2014, and then go up again to €25 million through 2018, but this seems to include the financing of other initiatives. Herbert Hainer, chief executive of Adidas, stressed at an investors’ day last week that this increase in annual fees would only kick in at the beginning of 2011 and that the level of the current contract will remain unchanged until then.
As part of the new deal, Adidas has committed itself to cooperation with the DFB in social projects, to a contribution to the construction of 500-1,000 new football mini-pitches and to other initiatives intended to promote young talents. Collaboration will be intensified at the regional level.
Separately, Adidas announced that it would continue to support the T-Mobile cycling team, which was shaken by a doping incident at the latest Tour de France. Adidas had then declared that it might reconsider its support, but last week it decided to remain involved with the sport after Bob Stapleton, general manager of the T-Mobile team, outlined a series of measures in close collaboration with Germany’s National Anti Doping Agency. Craft, the Swedish sportswear company that sponsored the Astana team, has taken a different view and decided to pull out in the thick of the doping scandal at the Tour de France.