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Adidas pulls plug on IAAF

News, 26 January 2016

MONACO: Adidas has ended its sponsorship deal with the International Association of Athletics Federations (IAAF) in a move that is widely assumed to be protective of the sportswear giant's brand and which raises the ante in sports marketing.

The BBC reported that Adidas had informed the IAAF last week of its decision to scrap the sponsorship deal four years early and said this was understood to be a direct result of the doping scandal sweeping the sport.

It added that the move would cost the IAAF and its commercial partner Dentsu tens of millions of dollars in revenue.

The timing of the decision – which was not confirmed by either party – just seven months before the sport's flagship event, the Olympic Games in Rio de Janeiro, came as a surprise to some, but others suggested that the importance of athletics to Adidas was declining.

"As one of the largest kit suppliers in the world, sponsorship is vital to Adidas," according to sports finance expert Rob Wilson.

"However, it is fair to say the impact of athletics sponsorship is declining and they are moving toward football as a more important area of growth," he told BBC Sport.

That view was echoed by Jacques De Cock, faculty member of the London School of Marketing. Quite aside from the doping issue, "the brand probably found very little impact on sales or brand recognition from its association with IAAF", he told Marketing.

"It is also possible that they are not prioritising professional athletic wear as this is not the big growth segment," he added.

He suggested that the brand's association with football and FIFA – another scandal-hit governing body – was "more important for general visibility".

Adidas's decision may prompt other sports sponsors to review their deals and the IAAF must now be concerned that its remaining official partners, which include Canon, Toyota, Seiko and TDK, could also pull out.

Brands have traditionally been reluctant to intervene in the affairs of sporting organisations, but earlier this month Adidas also made a foray into more subjective areas.

Talking about Adidas's £750m ten-year kit deal with Manchester United, chief executive Herbert Hainer professed himself satisfied with the business side of things, "even if the current playing style of Man United is not exactly what we want to see".

Data sourced from BBC, Marketing; additional content by Warc staff