In-Depth: How Sportswear Giants Adidas & Nike Distribute Their Sponsorship Expenses
This year will be utterly important for the two largest sportswear brands in the world, Nike and Adidas, since many big sports events such as 2021 Copa América, UEFA Euro 2020 or 2020 Summer Olympics will take place. The spending capacity of the average person might decrease in the upcoming years due to Coronavirus disease 2019, but this does not influence any deals Adidas or Nike have already closed.
However, we can already notice the impact Coronavirus has on professional sports and the contracts by taking a look at sponsorship agreements closed in the last 12 months or the fact that Ligue 1 has immense problems to even sell their television rights.
Nike vs Adidas: Sponsorship deal value by sport
via @Football_BM
It is immediately obvious that both brands prioritize the most important and global sport there is: football. American sportswear giant Nike spends exactly 50% of their sponsorship expenses on football (USD 834m), while Adidas even goes one step further and almost spends three quarters on football (USD 1.026m).
Nike spends exactly 50% of their sponsorship expenses on footballNike spends slightly more in total (USD 1673.4m) in comparison to Adidas' 1405.6m. 21% of Nike's other half of expenses go towards Basketball (USD 352m), while it adds up to one third of expenses together with American Football (USD 194m). College sports (8% - USD 130m), Baseball (6% - USD 100m) and Golf (4% - USD 100m) play a minor role within Nike's more differentiated budget.
It makes perfect sense that Nike's budget is more evenly distributed since the brand has exclusive deals with big leagues in other sports such as the NBA or NFL and they also have their headquarters in Portland, Oregon. Obviously, Adidas' headquarters are in Europe which partially explains the heavy prioritization of football. Additionally, European football also is a successful export product as it is the only sport that gets global exposure on a weekly basis.
College sports is Adidas' biggest priority in America
Since Adidas is heavily relying on football it is only consistent that no other sport takes up more than 10 percent of the budget. A few differences are that Adidas mostly spends their Basketball expenses on exclusive contracts with individual players such as James Harden or Trae Young, while they do not have agreements with the NBA or NFL. However, Adidas produces the NHL jerseys and also invests into other branches of football (Futsal, Beach Soccer). Arguably, college sports is Adidas' biggest priority in America making up 8% or 106 milion USD of the total budget.
The exact distributions are as following: US College - 8%, USD 106m; Futsal - 7%, USD 105m; Ice Hockey - 5%, USD 72m; Beach Soccer - 4%, USD 50m; Basketball - 3% USD 48m.
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