July 3, 2018 / 4:53 PM / 4 months ago

Nike favored to beat soccer juggernaut Adidas at World Cup

    By Noel Randewich
    July 3 (Reuters) - In a World Cup brimming with upsets, Nike
Inc looks on track to defeat soccer juggernaut and
archrival Adidas AG in the closely watched jersey
sponsorship battle.
     The two brands both have three teams playing in their
jerseys in the quarter-finals, with one game yet to be played to
establish the final eight. But the Nike swoosh decorates the
outfits of Brazil and France, the sides most favored by betting
websites to win the World Cup, plus Croatia. 
    Top German sports brand Adidas has Belgium, Russia and
Sweden in the quarter-finals, and Tuesday's match between
Adidas-sponsored Colombia and Nike-backed England will decide
the final participant in the last eight. Puma SE
rounds out the group as the sponsor of the Uruguay team. 
    "While Adidas dominates the European leagues and the U.S.
professional league, certainly any market share that Nike can
pick up in a non-traditional U.S. sport can only bode well for
the stock price and brand," said Jake Dollarhide, chief
executive officer of Longbow Asset Management in Tulsa,
Oklahoma. 
    Sports apparel makers typically sell the bulk of their fan
merchandise ahead of the start of the World Cup, but a team's
success on the field can generate extra demand for gear
emblazoned with its emblems and colors.
    U.S.-based Nike kitted out more teams than Adidas for the
first time in Brazil in 2014. Adidas fought back this year
sponsoring 12 of the 32 participating teams, including strong
early contenders Germany and Spain, along with hosts Russia.

    Nike supplied shirts for 10 countries this year.   
     
     
    The tournament took a disastrous turn for Adidas last
Wednesday, with 2014 champion Germany's unexpected elimination. 
Shares of Adidas, Germany's team sponsor, fell 2.7 percent in
the following session.
    In 2014, Germany accounted for a third of Adidas' roughly 9
million team jersey sales, Wedbush analyst Christopher Svezia
wrote in a recent client note, with an incremental 10 percent of
those sales resulting from Germany's tournament victory. 
    At the weekend, high-profile Adidas-sponsored teams
Argentina and Spain were eliminated. Likewise, Mexico lost to
Nike-sponsored Brazil on Monday.
    Heading into this year's World Cup, Adidas downplayed its
potential effect on sales, pointing to Russia's tepid economy.

    But the World Cup remains a major marketing opportunity for
Adidas, which is one of seven FIFA partners and the supplier of
World Cup match ball since 1970. 
    As well as team jerseys, sponsorship of top individual
players is critical for the promotion of soccer shoes. Ahead of
the World Cup, Nike expected 60 percent of players heading to
Russia to use its footwear.
    Since the start of the World Cup on June 14, Nike's stock is
up over 3 percent, helped mostly by a strong quarterly report
and sales outlook last Thursday. Adidas has lost about 5
percent.

    
 (Reporting by Noel Randewich; Editing by Alden Bentley and Bill
Rigby)
  
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