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Tuesday, February 14, 2006

Two giant teams in the World Cup: Adidas and Nike

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In the competitive world of sports brands, Nike president Charlie Denson on Monday unveiled Nike's latest football-related products and World Cup squad uniforms in a promotion that was as much metaphor as business promotion move.

In fact, just as Nike staged its launch in Germany, the home of Nike's main competitor, Adidas-Salomon AG, so is Nike intruding on Adidas' football business -- the corporation's heritage. Nike, which said 12 years ago that it wanted to be No. 1 in the football business, is rolling out one of its largest business promotion campaigns ever for the 2006 World Cup in its quest for that title.

Still, it's a tough year to try to knock Adidas off its throne. The World Cup is being held in Germany this summer, and Adidas is an official sponsor of the event and sponsor of Germany's three-time-winning national team.

Adidas will provide the balls for the matches and -- in a blow to Nike, which frequently runs commercials during big sports events -- has locked up a deal that ensures Adidas is the only athletic brand to air commercials on English-language broadcasts of the matches in the United States.

"Adidas has really put together a really strategic package for the World Cup," said John Horan, publisher of Sporting Goods Intelligence, an industry newsletter. "That's going to be insane for Nike to try and outsell them."

As you can see, figuring out who is No. 1 and who is No. 2 depends on what you include. Many analysts said Adidas has the edge when counting products used for football, not casual products that have football styling, which Nike counts in its estimates.

Still, it doesn't significantly change the landscape. "I don't believe it really matters who's number one except for woofing rights," said Matt Powell, contributing editor for Sports Executive Weekly, another industry newsletter. "There's a lot of woofing going around."

Nike, based near Beaverton, has made considerable strides in a sport long dominated by Adidas. In recent months, it has launched several products, ranging from casual football-inspired T-shirts to hard-core football boots. It sponsors the Brazilian national team, which beat Germany for the 2002 World Cup title.

That competition on the field may well determine who gains the upper hand -- for a while, at least -- in the football wars.

"To a large extent, it depends on the outcome of the matches," Powell admited. "If an Adidas squad wins, it's really good for Adidas. If a Nike squad wins, it's really good for Nike."