Adidas CEO challenges Nike on German football federation kit deal

Defending Adidas’s decision not to enter into a bidding war with US rival Nike, Bjorn Gulden, CEO of the German sport apparel and equipment group, said Adidas will continue to be interested in major football kit supply deals, including one for the French national team, but only if the price is right.

News of the separation from the German national football team has come at an unpropitious time for Adidas. In 2023, the group recorded its first annual loss in more than 30 years.

Last month, the German Football Federation (DFB) said that it is going to terminate its 70-year-plus partnership with Adidas, and that Nike will be its new kit supplier from 2027.

DFB stated that this decision has been taken in the interests of German football at the national team and grassroots level.

DFB’s shock announcement, only a few weeks before Germany is set to host the 2024 European Football Championship, sparked an outcry from German politicians, with some accusing the federation of being unpatriotic.

“Nike has had the upper hand thanks to what is generally thought to be a massive offer,” said Gulden, referring to reports that the US giant is scheduled to pay approximately €100 million ($106.5 million) per year as part of a deal that will run from 2027 to 2034.

“If the figures for what Nike is paying DFB are correct, they are inexplicable to us” in the light of Adidas’s own financial estimates, added Gulden.

National team football isn’t everything, said Gulden, praising the “advertising impact” of Adidas’s partnerships with top football clubs like Real Madrid and Bayern Munich.

Demand for national team kit replicas and merchandise is “much lower than it is for clubs,” he added, underlining that “[Adidas] is always trying to invest where advertising impact is strongest and sales are highest, and will continue to do so.”

Olympic hopes

As a result, Adidas will be aiming to ink other major kit supply deals, with the French national team too, but will invest only sums regarded as reasonable.

“We put forward a bid when we’re interested in a price that we think is the right one,” said Gulden, emphasising that “we will not go any further than that.”

Gulden, who took charge of Adidas in 2023, also outlined a plan to shift Adidas’s focus from the most popular disciplines, like football, to a more comprehensive range of sports.

“As a sport romantic, I’m keen to aim for breadth, for a wider array of sports,” said Gulden, himself a former footballer.

According to him, athletics is a domain in which Adidas would like to gain visibility.

“For me, it’s always a question of athleticism – the heart of every kind 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 Olympic Games, scheduled to start in July.

“I’m 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 track wearing Puma, when Gulden was in charge of Adidas’s local rival.

According to Gulden, lightning could strike twice if Noah Lyles, a promising athlete sponsored by Adidas, will be able to win gold for the USA in the men’s 100 m sprint in Paris this summer.

Bouncing back

However, Olympic success doesn’t necessarily translate directly into sales.

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

In 2024, Adidas has started to bounce back after a troubled period. After posting better-than-expected Q1 results, the group has revised its revenue and profit forecast upwards for fiscal 2024.

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

Adidas’s slump was notably due to weak sales in the USA, and to the end of its partnership with rapper Kanye West. Adidas distanced itself from the artist in late 2022, following allegations of anti-Semitism.

Since then, the group has been slowly selling off its remaining inventory of Yeezy products, accumulated for its once-lucrative collaboration with West.

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

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