Adidas CEO challenges Nike over German Football Federation kit deal

Defending Adidas' decision not to enter a bidding war with US rival Nike, Bjorn Gulden, chief executive of the German sports clothing and equipment group, said Adidas would remain interested in major football kit supply deals, including one for the French team. but only if the price is right.

The news of the separation of the German soccer team comes at an inauspicious time for Adidas. In 2023, the group posted its first annual loss in more than 30 years.

Last month, the German Football Federation (DFB) said it will end its more than 70-year partnership with Adidas and that Nike will be its new kit supplier from 2027.

The DFB stated that this decision was made in the interests of German football at national team and grassroots level.

The DFB's shock announcement, just weeks before Germany hosts the 2024 European Football Championship, sparked an outcry from German politicians, with some accusing the federation of being unpatriotic.

“Nike has taken the lead thanks to what is generally considered a massive offer,” Gulden said, referring to reports that the American giant is planning to pay approximately 100 million euros ($106.5 million) a year as part of an agreement that will extend from 2027 to 2034.

“If the figures for what Nike pays to the DFB are correct, they are inexplicable to us” in light of Adidas' financial estimates, Gulden added.

National team football is not everything, Gulden said, praising the “advertising impact” of Adidas' partnerships with major football clubs such as Real Madrid and Bayern Munich.

The demand for replicas and merchandise of the national team kits is “much lower than that of the clubs,” he added, stressing that “[Adidas] “We are always trying to invest where the advertising impact is strongest and sales are highest, and we will continue to do so.”

Olympic hopes

Therefore, Adidas will try to sign other important agreements for the supply of kits, also with the French team, but will only invest amounts that are considered reasonable.

“We submit an offer when we are interested in a price that we think is right,” Gulden said, emphasizing that “we won't go beyond that.”

Gulden, who took over Adidas in 2023, also outlined a plan to shift Adidas' focus from the most popular disciplines, such as football, to a more comprehensive range of sports.

“As a sports romantic, I am willing to aim for breadth, for a broader range of sports,” said Gulden, a former footballer.

According to him, athletics is an area in which Adidas would like to gain visibility.

“For me it's always a question of athleticism, the heart of every type of sport. No matter what you do, whether it's breakdancing, BMX, football or basketball, you have to be able to run or jump high,” he said.

Adidas shoes will be worn by athletes competing in 41 different events at the Paris Olympics, scheduled to start in July.

“I am sure that in four years, with a few exceptions, we will have products for every type of sport,” Gulden added.

Usain Bolt lit up the court wearing Puma, when Gulden managed Adidas' local rival.

According to Gulden, lightning could strike twice if Noah Lyles, a promising athlete sponsored by Adidas, manages to win gold for the United States in the men's 100m in Paris this summer.

Bouncing

However, Olympic success does not necessarily translate directly into sales.

“People don't walk around wearing a weightlifting or track and field shirt. What often happens is that interest in sport increases in a given country and around the world,” Gulden said.

In 2024, Adidas has begun to recover after a troubled period. After posting better-than-expected first-quarter results, the group revised upwards its revenue and profit forecast for fiscal 2024.

The brand is still “alive,” according to Gulden, but needs “a little time” to fully recover after posting an annual loss in 2023.

Adidas' decline is mainly due to weak sales in the United States and the end of its partnership with rapper Kanye West. Adidas distanced itself from the artist at the end of 2022, following accusations of anti-Semitism.

Since then, the group has been slowly selling off the remaining inventory of Yeezy products, built up for their once lucrative collaboration with West.

Gulden said designer partnerships remain an area of ​​interest for Adidas.

He added that the brand is working with “a lot of designers” and that Adidas “absolutely wants to work with people in the music, fashion and entertainment industries in the future.”