Adidas Counting on World Cup to Restore Revenues

Adidas has had a rough year, but they hope to end on a high note.

The German-based athletic apparel company recently reported a 30% decline in overall income for their third quarter sales.  For the period ended September, adidas earned only $319 million dollars, compared to the $452 million they earned the same period last quarter.

Adidas: Official Sponsor of FIFA World Cup (http://tinyurl.com/yzatndm)

Though the drop was painful, adidas now believes it can only go up from here.  “Due to a more moderate increase of input costs and positive impetus ahead of the 2010 FIFA World Cup,” said the company in its November 6 earnings report, ”group profitability will be significantly better in the second half compared to the first half of the year.”

The 2010 Cup doesn’t begin for another 211 days, but adidas anticipates a swell of merchandise sales in preparation for the professional soccer tournament.  As countries gear up for the most-watched international sports events, an extensive range of World Cup products will offered by adidas all over the world.

The company also hopes that their soccer ties will continue to impact sales post-tournament as well.  In addition to being the official sponsor of nearly a dozen teams, adidas is also an official sponsor of FIFA and the official sponsor of the 2010 Cup.  This means that the retailer’s logo will appear on everything from match balls, to referee and ball boy uniforms.

According to Bloomberg, “adidas is aiming to beat record soccer-related sales of 1.3 billion euros ($1.92 billion) in 2008, when the last European Championship was held,” and they are expecting positive growth for their soccer business in 201o.   

Since adidas is currently the number one soccer merchandise provider world-wide, the 2o1o Cup could not come at a better time for the struggling company.

Record Sponsors for NBA International Games

A record number of sponsors will join the National Basketball Association overseas this preseason for its international games.

The five professional basketball games will be played across Europe, Asia, and Mexico this fall, giving worldwide sponsors access to a comparatively untapped fan base.

adidas: Official Sponsor of NBA International Games (http://tinyurl.com/y8dxpyx)

“The event experiences — being able to touch and feel our product — are among the most valuable things we offer sponsors, and overseas partners are realizing how valuable that can be in reaching specific audiences,” said Emilo Collins, NBA Senior BP/International Development & Partnerships in today’s Sports Business Daily.

Three global brands are taking advantage of the NBA presence on all three continents – adidas, Coke, and EA Sports – while the majority of corporate partners are geographically tailoring their overseas sponsorship.  These partners include popular companies such as Hewlett-Packard, American Airlines, and Toyota, said Terry Lefton in his article linked above.

Sponsors such as these have been committed to the NBA as it tries to raise its brand awareness and increase its fan base overseas.  The preseason games are a part of the NBA’s increased efforts to take their game around the world –  which they attempted by hosting more than 345 international events in 158 cities and 24 countries since the start of the 2008-2009 season, according to NBA.com.

As professional basketball sweeps across countries such as China, Spain, and Taiwan, transforming fans into consumers as they go, more and more global brands will be sure to jump on for the ride.  This will be especially true as revenues from advertising in the United States continue on a downward trend.

“Like us, the NBA recognizes that there are many ways to communicate with people and that the landscape is changing every day,” said John Hackett, senior vice president, Marketing, Coca-Cola North America in a Coke press release.  “Our relationship offers the freedom to anticipate and adapt to new opportunities so that we are always on the leading edge.”