FIFA Chief's Resignation Provides Breather For Sponsor Adidas

By Ellen Emmerentze Jervell

FRANKFURT--FIFA chief Sepp Blatter's resignation has provided a breather for Adidas AG, the soccer body's top sports-industry sponsor, as it grapples with slumping sales and a image problems.

Mr. Blatter's announcement on Tuesday that he would resign after 17 years leading the global soccer body prompted applause from several big FIFA sponsors. Adidas called his exit a "step in the right direction."

The U.S. corruption probe of FIFA has been particularly rough on the German sportswear maker, which has sponsored FIFA's World Cup for decades and has a sponsorship contract that runs until 2030.

Following the U.S. Justice Department's indictment of FIFA officials late last month, all FIFA sponsors faced negative chatter. However, none was tarred as badly as Adidas, according to Freemavens, a company in London that analyzes social media. On Twitter in the two days following the May 27 indictments and arrests in Zurich, negative tweets about Adidas increased more than 300 times, according to Freemavens.

Adidas declined to comment on the issue.

In late March Adidas unveiled a new strategy to boost sales, profits and market share. The company is focusing heavily on the U.S., where it last year fell to third place behind U.S. brands Nike Inc. and Under Armour Inc., both of which are pushing hard into the global soccer market that Adidas dominates.

The Justice Department's move came as Adidas was launching several new soccer shoes in time for the UEFA Champions League final in Berlin on Saturday.

The negative response from the scandal has prompted some analysts to renew longstanding questions about the value that companies achieve sponsoring sports associations. Matt Powell, a sports industry analyst at NPD group, said he thinks "all sponsors will have to assess the return on this investment."

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