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Germany fight with Nike won't trigger price problems elsewhere, Adidas chairman says

Germany fight with Nike won't trigger price problems elsewhere, Adidas chairman says

Adidas chairman Herbert Hainer said Monday the fight with Nike which produced a record financial agreement to supply Germany's national soccer team wouldn't trigger price wars in other markets.
The American company's nine-month battle to move into Adidas' backyard ended Friday when the German Soccer Federation spurned its eight-year, US$500 million offer to accept a deal worth half as much from Adidas.
The Adidas agreement was billed by German soccer officials as a record sum paid to outfit a national team. Nonetheless, the country's top soccer official had to face accusations that a bad decision was made, letting the lucrative Nike deal worth hundreds of millions of dollars more slip away.
"I'm hurt. I refuse to accept that criticism," German soccer federation president Theo Zwanziger said. "We are at the peak worldwide as far as the amount that is paid for a national team."
Hainer called the signing a "historic day" for Adidas, which fended off Nike's bid to take away what amounts to its home team, and one which has worn the German company's three stripes while rolling to three World Cup titles during 50 years together.
Hainer considers the record offers for Germany a one-off situation, set off by Nike's reaction to recent triumphs by the world's second-largest sports gear maker. Adidas, he believes, had a strong 2006 World Cup, which came a few months after it signed with the NBA to be the basketball league's official uniform and apparel provider.
"All these things led Nike to aggressively attack in our home market," Hainer told the German news agency dpa. "But I don't believe this will happen in other markets."
Bundesliga clubs, who share in the revenues, were upset, saying the federation missed opportunities created by the American company's willingness to put out an unprecedented amount to get their logo on the country's national team.
Some thought the leverage provided by Nike could have been wielded by the federation to drive up Adidas' price, well beyond the euro25 million (US$29 million) it will now pay yearly from 2011 to 2018 to keep the Germany team.
Negotiations with Adidas "were poor" in light of the Nike offer, according to Roland Kentsch, business manager of Arminia Bielefeld.
Zwanziger, however, said money wasn't the only thing involved in signing a new supplier. Instead he said there were mixed reasons for sticking with Adidas, "tradition, money and legality."
The legality issue is that Adidas maintains it struck a verbal agreement _ which the federation disputes _ in 2006 that allows it to extend its contract to supply Germany until 2014. Arbitration failed to settle the matter, but if the German company's case was upheld in court, that would spike Nike's lucrative offer because it runs from 2011 to 2018.
Zwanziger acknowledged Adidas' long ties to the national team played a major role.
"Tradition has a high place in German soccer," Zwanziger said. "We have protected tradition and settled the legal question in a clean way."
At stake for Adidas and Nike was a national team hugely popular inside Germany, the world's third biggest economy. Along with Brazil, it has been the most consistent World Cup team, getting regular exposure to hundreds of millions of television viewers across the globe.
Since its first title in 1954, Germany has played seven of 14 World Cup final games, tying it with Brazil, and has never been knocked out before the quarterfinals. It also owns three titles at the European Championship, another tournament watched around the world.


Updated : 2021-03-06 09:15 GMT+08:00