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Nike vs Adidas: Brand matchup during Euro 2020

British journalist Simon Kuper suggested this month’s Euro 2020 tournament will be a celebration of European expertise and unity, as 24 of the world’s best teams compete on a relatively level playing field, enriched by lessons they have learned from each other.

While we focus on football, the two superpowers of the sportswear industry, Nike Inc and Adidas AG will only have eyes for each other in the latest bout of their battle for sales. Coming into the tournament, market-leading Nike has the edge in terms of teams, with nine of the 24 teams wearing its Swoosh logo, but Adidas, still fighting to reclaim its lead in the world’s favourite sport, has its three stripes on eight teams.  

Share of brands during Euro 2020
Share of brands during Euro 2020

The Nike camp involves the world champions France, the ever-optimistic England, and defending champions Portugal. Meanwhile, Adidas has top-ranked Belgium and two three-time winners of the competition, Germany and Spain. While Puma, the forever third wheel of this competition, is left with four clubs and just Italy of the big beasts. For the rest, there are only scraps, with Hummel (Denmark), Jako (North Macedonia), and Joma (Ukraine) completing the field.

The number of teams is not the only attribute that the big two sportswear brands are leading in. It is also evident in the value of those agreements. They have 70 percent of the teams at Euro 2020, but when you look at the cost of those sponsorships and the sales they should generate, their share is more like 85 percent. Three deals with Denmark, North Macedonia, and Ukraine are about £3.5 million annually, with most of that coming in the free kit, as opposed to cash is a tenth of England’s income from Nike. The top five earners at Euro 2020 — Germany, France, England, Italy, and Spain — account for 75 percent of the total kit sponsorship income, and the top 10 take 91 percent.

Value of every kit deal at Euro 2020 (Image courtesy: The Athletic)
Value of every kit deal at Euro 2020 (Image courtesy: The Athletic)

Last year, both companies’ sales were affected by the pandemic, but Adidas, whose strength in Asia and Europe, took a bigger hit than Nike, which dominates in American continents. As a result, the US giant extended its lead in the revenues stakes and now earns about 50 percent more than its German rival: £26 billion to £17 billion.

With a boom in online sales and a resurgence of the Chinese shopper, both Nike and Adidas made an incredible recovery at the end of the year. They account for about a quarter of the global spend on sportswear and equipment between them. It is little wonder that their share prices have more than doubled over the last five years and are touching historic highs again. Both Nike and Adidas represent a lot of how the sports industry trended in the past year. When we look at their financial reports and earnings, there are a ton of similarities between them. But they are not completely alike — their founding stories, cultures, and areas of strength are different. Adidas, for example, talked a lot about the importance of Euro 2020, which says a lot about how football is a big part of its vision. On the other hand, Nike didn’t talk about the Euros at all. They hardly mentioned football apart from Kylian Mbappe, and that speaks to their history as a running brand that got into football to take over the world. Moreover, how the company has used individual athletes as marketing vehicles, while Adidas has built its brand on teams. While Nike has made significant strides forward in establishing itself as the football leader worldwide, Adidas seems to be having a hard time accepting that fact as it continues to increase its investment in international competitions.

Brands usually get benefits in marketing and sales. They are betting on teams that will go far in the tournament, in return expanding their brand exposure. The nationalistic attitude of football also makes these deals more lucrative. There also tends to be a correlation between these kinds of deals and sales as Germany ended up doubling their sales after the 2014 World Cup. 

Brands usually get benefits in marketing and sales. They are betting on teams that will go far in the tournament, in return expanding their brand exposure. The nationalistic attitude of football also makes these deals more lucrative. There also tends to be a correlation between these kinds of deals and sales as Germany ended up doubling their sales after the 2014 World Cup. 

Is throwing money at national associations the best way to garner popularity?

After all, fans only really buy international shirts every other summer, and even then, they only do it if their team has done well. As the English Football Association discovered in 2016 when it had to accept less favourable terms, £400 million over 12 years, than their previous agreement. Nike has noticeably reduced the number of footballers it is sponsoring to wear its footwear in recent years. It has also reduced the amount of money it pays anyone apart from its stars, which can be considered as a more cautious approach as the marketing landscape evolves in the sporting world towards digital options. With two days into Euro 2020, we’ll know who comes out on top in what is possibly the biggest rivalry in the business of sport this time next month.

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