Problems lie ahead for Adidas as it threatens to quit sponsoring IAAF, faces questions on Fifa and battles rival Nike for market share

Stephan Shakespeare
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Adidas is still locked in competition with Nike (Source: Getty)

As if the sporting world hasn’t been floored by the goings on at Fifa, now Adidas has threatened to pull the plug on its sponsorship of the IAAF (the International Association of Athletics) due to an alleged doping scandal.

The issue for Adidas is what other considerations its bosses had when making the decision.

There is anxiety over Adidas’ reputation should the brand remain tied to the embattled IAAF. YouGov BrandIndex data does indeed show that Adidas has suffered on this front in the past 12 months. Its Reputation score (whether a respondent would be proud or embarrassed to work for the brand) has decreased by eight points since mid-March.

This is not just to do with Adidas’ association with athletics. A large part of this is concerned with its sponsorship of Fifa competitions, which has prompted accusations of hypocrisy. If bosses were so appalled at the goings on at the IAAF, what caused the apparent lack of action with Fifa?

The answer is perhaps that Adidas may view football as indispensable to its marketing efforts. It would be surrendering itself to its main market rivals. At a basic level, perhaps athletics was simply not worth the investment anymore.

Adidas is locked in a ceaseless battle with its biggest rival, Nike. Its continued sponsorship of convicted cheats Justin Gatlin and Tyson Gay has drawn particular opprobrium from athletics fans. Our Purchase Consideration indicates a gradual decline over the past year for both brands, indicating the impact various stories has had on practical level.

Whether consumers truly believe the company has decided upon this course of action due to its distaste with the sport is another question. With investor pressure already present, the next 12 months will be crucial in the battle for market share in the highly competitive – and super lucrative – sportswear sector.

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