Adidas deepens soccer roots with MLS deal
Adidas deepens soccer roots with MLS dealPublished August 7, 2017
|The six-year extension with MLS includes added opportunities at the pro and youth levels.
“I didn’t even know what the pitch was three years ago,” King said, reflecting on when he was named to his current position in 2014 after serving as TaylorMade-Adidas Golf CEO. “But now I’m a soccer man.”
The clearest indication of that yet came last week when Adidas announced it had signed a six-year extension with MLS to continue as its official supplier partner and outfit all MLS clubs and their youth affiliated clubs through 2024.
The deal, valued at $700 million according to industry sources, marks the company’s largest investment in soccer in North America, as well as MLS’s largest commercial partnership.
The deal represents a 250 percent increase over the eight-year agreement signed with Adidas in 2010, which was valued at $200 million, or $25 million annually. The league did not openly shop the rights, and preferred to renew with Adidas. The deal’s value is not expected to increase as MLS continues its expansion process that will result in 28 teams across the league. The league will have at least 23 teams when this new deal begins, compared with 16 in 2010.
“We love soccer as a company, and we want to dominate soccer around the world — specifically in the U.S. too, and this gives us the best platform to do just that,” King said.
Adidas, which is a partner of FIFA’s through the 2030 World Cup, has jersey supplier deals in soccer with clubs like Bayern Munich and Manchester United, individual endorsement deals with hundreds of players including Paul Pogba and Lionel Messi, and has continued to invest in the sport as it competes with U.S. rivals Nike and Under Armour.
During the company’s second-quarter earnings call last week, CEO Kasper Rorsted said Adidas will increase its marketing spend by more than $800 million ahead of 2020, mentioning the new MLS deal, as the company’s sales have continued to outpace its competitors, especially in the U.S. In that report, Adidas said sales grew 26 percent in North America year over year and it also will expand its U.S. base in Portland. Comparatively, both Nike and Under Armour recently reported flat North American sales, as well as job cuts.
For King, the company’s move to deepen its roots with the U.S. soccer fan is coming at the right time.
“Two stats tell me a big story — 36 percent of 6- to 11-year-olds play soccer, and almost 80 percent of children aged 12 to 18 are fans of soccer,” he said. “When you look at how the game is growing from both a participation and fan-base perspective, I think it’s the most exciting sport in America — obviously it’s not at the same level, or even close, to the NFL, but when you look at trajectory and where it could be in just a few years, it’s amazing.”
The renewal will see Adidas deepen those roots in the youth market. While the deal will see Adidas marks appear on all of the league’s current 22 teams, as well as the additional six expansion teams it expects in the coming years, it also will see Adidas marks appearing on all MLS club youth academies, development leagues and youth-affiliated clubs, which total nearly 100,000 players across the country.
In addition, it will see Adidas work with MLS to bolster its Generation Adidas venture, which the league operates alongside U.S. Soccer. The program identifies high-level youth players in the U.S., allowing them early access to the MLS draft and the ability to bypass college to do so, as well as a guaranteed scholarship if they choose to return to school. Graduates of the program, which is being expanded to Canada this year, include Clint Dempsey, Michael Bradley and Jozy Altidore.
“We need to take these really elite, young players and help develop them,” King said. “The one thing this league does need is homegrown superstars like the way baseball and football do.”
Adidas also will help MLS build the brand of those potential stars. King said the league will provide Adidas with unique content, such as clips from games, films of practice and exclusive interviews, that Adidas can share via social and digital media. “Our goal is to tell a lot of interesting stories about what’s happening with MLS and Adidas in a very authentic way,” he said. “If we can tell the stories of these homegrown players who came up through the system out of the Generation Adidas program, this is a way to connect those personalities to the fans.”
The company also will expand the way it integrates cultural elements like music and art into its partnerships, akin to recent campaigns it has done with Manchester United, unveiling the club’s new jersey in a music video by rapper Desiigner.
“We think how our brand intersects sport and culture gives us a big advantage over a few of our competitors,” King said. “That is a big part of what we need to do to continue to grow our brand in the U.S. and MLS — yes, you need to protect the history of the game, but we also want to showcase the American take on it and make it even cooler for the U.S. culture.”