The race to be the biggest sports brand in the world has been a long. It seemed like the contest was over after Nike established its empire and won the lion’s share of the market.
It was like a set- up when Nike surpassed Adidas’s role as the football brand by gaining the hearts and share of wallets of millennial. Even though Adidas still has the heritage, legacy brand with a reputation for the ages, but by the year 2014 , the numbers revealed a stark reality.
Adidas’ current gross profit is just over half of Nike’s, at $9.379 and $14.971 billion, respectively. For a while, it seemed that Adidas’ held on to its market dominance in the European market and allow Nike to take over the over ripe market in the U.S.
Nike connected more with younger generation through their branding and marketing , they also keep close tap and invest deeply through sponsorship and endorsement with the most lucrative of American sports like football, basketball, and baseball.
First, a History Recap
From 2001 to 2005, Adidas’ market capitalization leaped from $3.59 to $10.96 billion, which was a huge increased for the Germany based company. In 2003, David Beckham was signed for they signed for $160 million. This was followed by Lionel Messi’s 10 million dollars deal a year.This contract was said to be a lifetime deal recently signed by the Portuguese rival,Christiano Ronaldo.
Nike’s value exploded, growing from $3.97 to $15.9 billion. In 2002, the company acquired Hurley and Converse by 2013. They also signed LeBron James for a staggering $93 million and followed by Kobe Bryant who was once with Adidas for $40 million, effectively replacing the gap left by the Legend Michael Jordan .
Nike continue to be aggressive with the purchase of Starter in 2004 and the launch of Nike’s 20th Jordan shoe in 2005, an incredible continuation of the GOAT when it comes to sneaker designs. These investments were very important milestones in the company’s future success and current dominance in the Industry.
Then the big boom, by 2006 to 2010, Nike’s value skyrocketed from $16.39 to $63.45 billion. Kevin Durand was endorsed in 2007, acquired longtime football favorite Umbro in 2008, and launched the Yeezy 1 in 2009.
Although, Adidas responded by acquiring Reebok for a monster price tag of $3.8 billion and becoming an official NBA merchandiser, but it wasn’t enough to fill in the gap, with the momentum Nike had built.
Today, Nike’s market capitalization as at March 2018 stood at $108 billion while Adidas reports around $36.3 billion for the end of March 2017. Nike is the recognized sports footwear and apparel leader of the world, with Under Armour and Adidas behind the market leader.
In this effort, Adidas launched a barrage of youth-centric, urban-inspired campaigns (#FirstNeverFollows, #BossEveryone, The Base, The Tango League) and brought on the cool kids to rep the company. The brand endorsed American songwriter Katy Perry and NBA player Derrick Rose, signing of Kanye West and his game-changing Yeezy boots.
Adidas is looking to make a bang by creating a cultural boom. (immediately Kanye ended his contract with Nike and signed a $10 million contract with Adidas, the release of the Yeezys was so publicized the shoe immediately sold out.)
For the Love of Football
Who do we think is going to win this year’s branding tournament? Check out this snappy overview of our analysis.
The 32 World Cup teams were sorted into eight groups. But more than half the athletes in Russia’s stadiums will be wearing Nike, researcher PR Marketing predicts.
Four years ago in Brazil, 52 percent played in Nike footwear and 36 percent wore Adidas .
According to Peter Rohlmann, PR Marketing’s founder.“This is by no means a lucky punch for Nike,” Rohlmann said. “Nike acted earlier and broader than Adidas did when it comes to private endorsements.”
Adidas has long-running partnerships with national and club teams, and has had deals with the big global soccer associations since the 1970s, putting its logo on balls, referee jerseys and stadiums across the Continent.
In Europe alone, sportswear makers spend 800 million euros ($948 million) a year sponsoring clubs like Real Madrid or Manchester United and a further 500 million euros annually backing national squads, according to PR Marketing.
So what is your take on the analysis above? Is it finally Nike’s year to overtake adidas in the world of soccer? Or will addidas continue its dominance once more in the world of soccer?
Share your thoughts!