Adidas smashes record kit deal with Manchester United after winning World Cup brand battle

Giant sports brand Adidas announced the largest team kit deal in history with Manchester United, yesterday.

Starting in the 2015/16 season, the 10 year deal is worth $1.3billion (£750m), at $130million (£75m) per year, smashing the previous record deal set earlier this summer by competitor Puma with Manchester United’s rivals Arsenal, which will see the London team take $51m per year for the next five years.

This new deal currently blows out of the water the richest club deal, also negotiated by Adidas with Real Madrid for $41m per year, and is streets ahead of Nike’s deal with the NFL. Nike pays an average of $18m for this sponsorship deal.

The announcement comes hot on the heels of Manchester United’s seven-year, $559m shirt sponsorship deal with Chevrolet, and a triumphant World Cup for Adidas, which saw two of its marquee national teams, Germany and Argentina, contest the final, with the world’s highest profile player, Lionel Messi, sporting Adidas gear, and the world’s most exciting emerging talent, James Rodriguez from Columbia.

The deal revives Adidas’s association with Manchester United, which last saw the club supplied by the German brand in 1991-92. Many football fans will fondly remember the Adidas days of, Gary Pallister, Brian McClair, Steve Bruce, Mark Hughes, Gordon Strachan, Captain Marvel Bryan Robson et al.

 Adidas makes aggressive gains in the war of the sports brands.

After many years of intensified competition from American giant Nike in the football arena, European behemoth Adidas has come striking back with this bold deal.

Adidas chief executive Herbert Hainer said the deal would help the firm "to further strengthen our position in key markets around the world".

He added: "We expect total sales to reach £1.5bn during the duration of our partnership."

Notably, as the incumbent kit supplier, Nike was given first refusal on an extension with Manchester United and had the right to match any offer. They chose not to move forward.

This is a clear statement of intent by Adidas that it is taking the fight against its competitors to a new level. Last night the BBC reported that in trading on the German stock exchange on Monday, the firm's shares closed up by 2.73%.

Adidas also supplies Bayern Munich, Chelsea, AC Milan and Flamengo. From the 2015-16 season, they will also provide kit for Juventus. 

The Manchester United and Premier League brands also come out winners

The deal also acts as a massive boost for Manchester United, following the turmoil of its worst ever season in the English Premier League. 

It is a renewed vote of confidence in the club’s brand as the world’s leading internationally supported football team, and will serve to reinforce the club’s pre-eminent position.

Coupled with this, the fact that this huge agreement has been signed with one of the EPL’s leading teams will shore up the image and reputation of the league as the best and the most competitive in the world. In spite of England’s disappointing early exit from this summer’s World Cup finals, the deal ensures that English football remains centre stage.

With Nike supplying the losers in the World Cup, and England’s ailing national team, what will their next move be?

Battered Brand: Suarez, Blatter and the face of football

As the fiesta of football that is the 2014 Brazil World Cup sambas into its second scintillating week, it's a good time to reflect on what has been a roller-coaster for the sport.

From a PR and branding perspective, FIFA is presenting us with some fascinating lessons, and the two most obvious controversies offer us delicious food for thought.

While our minds are fixed on an eating analogy, let's consider firstly the Luis Suarez biting incident, or "Bitegate" as I'll call it for short. 

Well, judging by the global reporting and commentary on Bitegate, it seems obvious to everybody outside of Uruguay that our hungry adopted Scouse superstar has brought himself and the game into disrepute. 

What was notable was the speed in which FIFA responded with an expulsion from the tournament, a lengthy ban from the game and a fine. Although the fine was risible when we consider how much Premier League footballers get paid, the swiftness and severity of the expulsion and the ban suggest that the footballing authorities have learned some lessons.

In the past, both national and international footballing federations have proved ponderous in making such decisions, and their lack of decisiveness has damaged the game's reputation. So this fast turnaround is welcome. If some reports are to be believed, the judgement will be contested. That as the case may be, it was understood that if something wasn't done quickly, football's reputation would  have a chunk taken out of it, as well as Chiellini's shoulder.

In this particular case, the product and brand, namely football and FIFA, have been protected from the dissatisfaction and cynicism that consumers (in this case the global football audience, except for Uruguayans) feel when their favoured product and brand demonstrates inaction in a crisis situation. That is what proves unsatisfactory.

Conversely, the ongoing controversy concerning Sepp Blatter, the decision to award Qatar the World Cup competition, and his decision to stand yet again as FIFA president, is threatening to drag football into the mire. Mumblings about self-interest and avarice are fast becoming a chorus of disapproval.

Mr.Blatter seems to be making some serious mistakes for a number of reasons. Firstly, awarding Qatar a summer tournament in the heat of the Arabian desert seems to be wildly impractical, and probably dangerous for players and supporters alike. Secondly, allegations of shocking conditions for the workers building the facilities leave an appalling taste in the mouth, as do allegations of bribery and underhand negotations. Each of these alone would call into question the judgement of a CEO of a normal corporation. Yet Mr.Blatter stubbornly insists on not vacating his throne. It does not inspire confidence, so much so that even Michel Platini at UEFA, himself a master of politicking in the halls of footballing power, has publicly withdrawn his support for Mr.Blatter.

As for the forthcoming leadership vote, it has been widely reported that Mr.Blatter had planned to stand down after his latest tenure, but he has since gone back on his word. So now, many might argue that his word as well as his judgement apparently can't be trusted. Mr.Blatter has begun to resemble a fading monarch or president, clinging to his elevated position without a mandate. This is hugely damaging for FIFA the brand, and for football, the product.

It is understandable that a leader who has enjoyed a long and successful tenure might feel a personal sense of loss at the thought of ending his career, but his recent moves and his insistence on remaining in situ can no longer be considered for the good of the brand and the product.  The lesson here is that when the rot sets in for a leader's reputation, it is tough to stop the rot, and arguably it must be time for a change. It will be fascinating to see whether this will happen, and what the implications will be for FIFA and for football.

What has perhaps saved the situation from worsening is the World Cup competition itself, which has proved so far to be the most open, exciting and absorbing for quite some time. It demonstrates that fundamentally, football the product, is good. It remains to be seen whether the actions of its mandarins will help it on hinder it in the near future.

Meanwhile, on a lighter note, some bright sparks across the world in ad-land have been using the goings-on in Brazil to great effect for their companies and clients.

The fast folk at McDonald's Uruguay didn't mess around after Luis Suarez chomped on Chiellini. It took only a matter of minutes for them to post this on their Twitter feed:

It's a friendly invitation: "Hi Luis Suarez. If you feel hungry, come to take a bit of a BigMac."

Similarly, South African global brand Nando's, make a similar kind invitation.

  

 And in the UK, Mars confectionery didn't miss a trick with their Snickers brand Twitter Feed: 

Proving that with nimble thinking, every crisis for someone can have a positive outcome for someone else. Good work by these brands.