CHICAGO — Athletic brands have ambitious sales goals for the World Cup, which kicked off last week. But will a storm of negative publicity impact their plans?
Protests flared up again in Brazil last week regarding hosting expenses, while concerns continued about match-fixing in FIFA’s tournament qualifiers and the escalating death toll at construction sites in 2022 host site Qatar.
Adidas, a World Cup sponsor since 1970, released a statement last week in response to a bribery investigation in Qatar. The company affirmed its affiliation with the international football association, but still expressed displeasure.
“Adidas enjoys a long-term and successful partnership with FIFA that we are looking forward to continuing. Having said that, the negative tenor of the public debate around FIFA at the moment is neither good for football nor for FIFA and its partners,” the statement said.
“[The Qatar situation] is a black eye for FIFA and, to some extent, the brands who are supporting it,” said Matt Powell, an analyst at SportsOneSource.
But Powell noted a brand’s connection to the World Cup and FIFA isn’t as impactful to its reputation and bottom line — either positively or negatively — as the players who wear the shoes.
“The real value is in investing in the teams and getting the best players in your shoes,” he said. “As long as the players get to the stadiums and play, that’s what the world cares about.”
Macquarie Securities analyst Laurent Vasilescu noted that Nike enters the tournament in a position of strength. After major efforts, the brand has reached a position to threaten Adidas’ global dominance in the category. “As of last May, [Nike’s] global football [revenues] were $2 billion. If the [firm] grows that business with the World Cup at a double-digit rate, that could get them to $2.2 billion or $2.3 billion,” he said.
Nike, which is sponsoring Brazil’s national team, is forging ahead with an expansion plan, called “Twenty Twenty,” that launched in 2012 with the goal of doubling the firm’s Brazil operations by 2020. Two years ago, the company opened a brand experience store in Rio de Janeiro’s Ipanema district, and in April set up its first soccer-only store in the Copacabana neighborhood.
For Adidas, the World Cup is the centerpiece of its marketing efforts, which Ernesto Bruce, manager of soccer for Adidas America, called “the largest and most comprehensive” marketing campaign Adidas has run. “We kicked off the journey earlier than anyone,” he said. “And since November, we’ve been relentless, telling Brazil-inspired or World Cup-inspired stories every month.”
The brand has established a command center in Brazil that will stream live updates, interviews, behind-the-scene coverage and other exclusives on its website. All told, Adidas, which got off to a slow start this year, is targeting 2 billion euros in sales, or $2.7 billion at current exchange, in the category for the year.
Puma, which also has weathered a troubled year, is taking a different tack than both Adidas and Nike. The athletic firm will reserve its major marketing push until after the tournament wraps to catch the back-to-school market.