Nike facing Brazil balancing act

US: Nike facing Brazil balancing act

Author: just-style.com | 4 March 2008

Nike could face pressure from the Brazilian Soccer Federation (CBF) to renegotiate sponsorship terms after details of its lucrative deal with the French national team were revealed by the French Football Federation (FFF) last month.

A spokesperson for Nike declined to comment on the reports when contacted by just-style today (4 March).

Nike has outbid rival Adidas to take over the sponsorship of France through an agreement starting in January 2011, and in-turn lasting until 2018.

As a result, officials at the CBF are expected by local media to demand an improved sponsorship spend to its existing deal, which runs to 2018.

Although Nike did not disclose specific terms of its France agreement when the deal was announced on 22 February, The FFF announced that the offer was worth at least EUR42.66m (US$64.87m) per season.

Meanwhile, Nike's current contract with Brazil is said to be worth US$22m per year, Dow Jones reported, citing Brazilian newspaper O Globo.

Terms of the French deal, worth EUR320m over the full-term, were detailed by the FFF as it justified selecting Nike ahead of offers submitted by current sponsors Adidas and French sportswear group Airness, owned by Groupe JAJ SA.

Nike partners with other national teams such as Holland, together with club teams like Manchester United, Inter Milan and Barcelona.

Since the early 1990s, the Oregon-based firm has grown its football revenues from about $40m to approximately $1.5bn.

Furthermore, it has completed the acquisition of football brand Umbro, for GBP285m (US$566m).

The national teams of France and Brazil both have a rich footballing heritage, having won the World Cup once and five times respectively.

By Joe Ayling.

Sectors: Apparel, Retail

Companies: Nike, Adidas, Umbro