The German Football Federation (DFB) has disclosed that Nike is offering €600 million over an 8-year period to become its sponsor after 2010. Nike’s offer includes an immediate signing bonus of €50 million and a similar sum for the German national women’s team, which won the world championships in 2003, and an annual fee of €56 million. That compares with an annual fee of around €11 million that it is now getting from Adidas, which has an agreement in principle to extend its contract with the DFB until 2014.
The Big a immediately replied that it doesn’t want to be dragged into a bidding war with the Swoosh. The DFB in turn has put more pressure on Adidas to raise its annual sponsorship fee, considering Nike’s recent offer. The DFB published a survey indicating that 72 percent of the German public would welcome Nike as the sponsor of their national team if much of the extra money were used to organize football programs for the youth and to build more football pitches for small clubs and schools.
The survey actually asked three questions, addressing a sample of 1,000 people over the age of 14. The first questions simply asked whether the DFB should switch from Adidas to Nike, and the answer there was 40 percent “no” and only 19 percent “yes.” The second question asked whether the public would favor the switch if Nike would pay €40 million more than Adidas annually, and there the score stood at 34 percent for each of the two brands. The swing to Nike occurred with the third question, where the benefits were listed.
Independently of these questions, Adidas remains the most “sympathetic” brand in Germany, with a 61 percent lead, followed by Nike with 43 percent. Among the football fans, Adidas has a stronger score of 74 percent, against 49 percent for Nike. On the other hand, 63 percent of the Germans and 74 percent of the German fans know that Adidas is the official sponsor of the DFB
Furthermore the DFB has demanded and obtained an independent legal opinion which it says shows that it can get out of the agreement in principle signed with Adidas last summer. In a statement issued today, Adidas said that it remained convinced, after detailed examination of the expert opinion commissioned by the DFB and after checking its case internal and external lawyers and law professors, that its agreement has been effectively extended until 2014. It said it will continue its talks with the DFB to work out a solution in a spirit of partnership. Company officials indicate that Adidas may call for independent arbitration, if necessary, rather than go to court over the issue.
Observers wonder whether Nike is offering to pay so much money for the German team as a pure exercize in public relations, knowing that Adidas’ deal with the DFB cannot be broken. They also feel that Nike is simply bluffing to get Adidas to pay more, considering that it is paying only about $12 million a year for the national Brazilian team that it wrested from Umbro many years ago.
