This past Monday, a European police
intelligence agency known as Europol announced the results of an operation
known as Operation Veto, revealing that 680 soccer matches in Europe have been
deemed suspicious of match fixing. These allegations consist of matches both at
the club and international level, potentially involving some of the world’s
best teams and players. Soccer has always had the reputation of being a "beautiful game," but these results highlight several old suspicions of match fixing as well as brand new, unheard of accusations. It will be interesting to see how this affects Nike and
Adidas within the European soccer market, one of their largest sources of
revenue. Nike is considered to be the world’s top sports brand, but Adidas has
always controlled the European soccer market due to its history and sponsorship
of the top international/club teams and players (including Lionel Messi) in
Europe. Recent accusations have caused several sports stars/teams to lose
sponsorships. Although high for both teams, the stakes seem to be higher for
Adidas, as their European soccer market share is one of their few global
advantages over Nike, and one they must continue to have in order to keep pace. If any of these companies’ partners are deemed guilty of
match fixing, impacts on either of these brands could be devastating.
Not only do drastic events such as this one affect Nike and Adidas market share in Europe, but brand success can also heavily rely on the success of particular sponsored teams. In 2008, Nike acquired Umbro sports apparel for about $483.7 in an attempt to surpass Adidas in the profitable European soccer market. At the time, Umbro had a deal in place with the English national team, which potentially could have produced exquisite results for Nike. England failed to qualify for the 2008 European Cup, however, hindering Nike's chances of taking over. When England failed to qualify, Umbro's sales plummeted, and were not able to increase to the point of a full recovery. At the end of 2012, Nike sold Umbro to Iconix Brand Group, Inc. for more than $200 million less than but they bought it for in 2008. Had England not only qualified for but advanced deep into the final rounds of the European Cup, Umbro sales would not have declined and Nike may have been closer to overtaking Adidas as the top soccer brand in Europe.
-John McCann
I'm not sure this scandal will have much of an impact on either company. Juventus was involved in a huge max fixing scandal a few years ago and I believe Nike currently makes their jerseys. Juve didn't lose much of their loyal fanbase and I don't think anyone saw sponsors as in any way responsible for the match fixing so it wasn't like their reputations took a hit. I could be wrong but I don't think match fixing will have a real effect other than to decrease exposure to the brand if the club misses out on European football because of punishment from UEFA.
ReplyDelete-Dan Reardon
Being as it is Michael Jordan's 50th birthday, there has been numerous stories in the news lately on how Nike was the first to innovate and give a player an exclusive show exclusively made for that player. Looking back that might have been the best idea Nike could have made as Air Jordans have over $1 billion per year in sales and contribute to the huge market share that Nike and Jordan together have in the basketball show market. It is interesting to note as well that when Jordan was drafted in 1984 he wanted a show deal with Adidas and was not to keen to meet with Nike. Can you imagine if Jordan had signed with Adidas instead of Nike? The two companies we know of today would look a lot different that is for sure.
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