Nike and adidas have been locked in a very public rivalry, ever since sportswear became profitable. A shocking headline recently amplified this dynamic, when the German Football Federation (DFB) announced that Nike would receive the contract for providing uniforms for its 2027–2034 seasons, effectively ending its relationship with the German adidas brand, which had been supplying the team uniforms for 77 years.

According to experts, DFB’s decision came down to finances. Nike offered €100 million per year for the contract, double what adidas had bid. In recent years, Nike has aggressively pursued various high-profile sponsorships, prioritizing brand visibility in key markets, including key national teams throughout the global soccer market. In the meantime, adidas has been facing very public financial difficulties, such as the announcement of first annual loss in more than 30 years—largely due to its contentious and ill-advised contract with Kanye West and the resultant discontinuation of the Yeezy line.

In response, adidas CEO Bjorn Gulden cited the goal of recovering the company’s financial health, prioritizing long-term stability over large-scale advertising. Matching Nike’s bid for DFB’s uniforms would have been unsustainable for adidas, as the company concentrates on managing its costs. Still, the announcement came as a shock. 

German officials and fans alike expressed regret at losing what seemed like a piece of their national identity. Both the Health Minister Karl Lauterbach and Vice Chancellor Robert Habeck publicly criticized the decision. Such reactions might seem extreme, yet adidas has had a long-standing partnership with DFB, which most Germans perceive as a point of national pride. Throughout the team’s history, adidas has applied its signature style and branding to every uniform, designing iconic kits that have gone on to commemorate major victories. The immediate backlash to the announcement reflected this widespread sentiment, reinforcing the importance of fan perceptions in marketing decisions. 

In turn, adidas has experienced some surprising benefits from the detrimental contract loss. It has enjoyed an unexpected increase in sales in Germany, seemingly due to purchases by patriotic buyers who hate to see it replaced by Nike. It even reported strong profits in the first quarter of 2024. The company also has turned its attention to similar contracts for other leagues, winning its bid to sponsor the 2024 Euro Cup, during which it will launch new home and away jerseys for DFB. With these signals of overall brand momentum, even though the loss of the DFB contract represented a powerful blow, Nike’s acquisition of the contract arguably could turn out to be a good thing for adidas and its efforts to define itself for the long term.

Discussion Questions 

1. What kinds of opportunities can a crisis like losing a contract create for firms?
2. Do fans of a sports league, like DFB, care about which company is manufacturing the merchandising? Does your answer change for different leagues?

Sources: “A Marketing Victory for Nike Is a Business Win for Adidas,” The Economist, March 27, 2024; “Nike’s Germany Kit Deal ‘Inexplicable’, Says Adidas CEO,” ET BrandEquity, April 20, 2024; Stefan Nestler, “Nike Over Adidas: German Football’s Monumental Switch,” Deutsche Welle, March 22, 2024; OpenAI ChatGPT, “Assistance with Research on Marketing Strategies in the Sportswear Industry,” ChatGPT, August 12, 2024.