Nike and Adidas
Things are getting pretty heated between Nike and Adidas right now. If you were to look at the books, it would seem that Nike is absolutely crushing Adidas. Their inventory and assets/market cap is valued at $86 billion USD. That’s a staggering number, and it’s hard to believe that Adidas could even come close to touching it. However, Adidas’s deal with Kanye West has been steadily rocketing them to the top. Adidas even snatched up Houston Rockets star James Harden with a $200 million USD endorsement deal, thus challenging Nike in a space that they’ve dominated for a long time: basketball. You better believe that these two giants are about to face off. With that thought in mind let’s take a look at the history of the two companies.
Recently, Adidas has surpassed Jordan Brand as the second most popular shoe company in the US. Of course, this is a direct challenge to the top dog as Nike actually owns Jordan Brand. From the beginning of this year to recently, Adidas has dominated by capturing 11.3 percent of the U.S. market share. That’s about double what it had last year which was 6.6 percent. It is true that their growth is unprecedented, but it still has a long way to go to catch Nike who sits firmly at the top.
Adidas has a war-torn and battle-scarred history. It is a multinational Corporation headquartered in Herzogenaurach, Bavaria and is the largest sportswear manufacturer across all of Europe. The brand was first registered on August 18th, 1949 by founder Adolf Dassler. After a nasty feud between Dassler and his older brother Rudolf, the first true shoe rivalry began. Rudolf formed Puma and became the direct rival of the Adidas brand. After surviving the hells of WW2 (which played a large part in the nasty split between the siblings), the two brothers began to promote their businesses in a big way.
In 1947, the brothers tore the city of Herzogenaurach in half with their rivalry. The town earned the nickname “the town of bent necks” as people tended to look at the shoes that strangers wore who strolled into town. The town’s two football clubs were even involved. Adidas sponsored the ASV Herzogenaurach club and the 1 FC Herzogenaurach were supported by Puma.
Adidas first added its iconic 3-stripe logo following the 1952 Summer Olympics from the brand Karhu Sports for two bottles of whiskey (rumored to have been valued at 1600 euros). In 1989, the French industrialist Bernard Tapid bought the company for 243.9 million euros because the company was going under. Tapie moved the production of the company offshores to Asia and also hired Madonna to promote the product. From there, the shoe line only gained in popularity.
Nike was originally known as Blue Ribbon Sports (BRS) and was founded by Phil Knight and his coach Bill Bowerman in January 1964. In its first year of business, BRS sold 1,300 pairs of Japanese running shoes that grossed around $8,000. By 1965, the company made about $20,000. It was a start and the company wasn’t going to slow down anytime soon. The iconic “Swoosh” was first used on Nike shoes on June 18th, 1971.
In 1976, the company hired John Brown and Partners as its advertising agency, and things began to blow up from there. With aggressive marketing tactics, Nike had gobbled up 50% of the market share in the US athletic shoe market. The “Just-Do-It” ad ran during a campaign in 1988 and was eventually coined as one of the top five ad slogans of the 20th century. The 80’s and 90’s were a time of growth and prosperity for Nike. It was in 1990 that Nike moved its headquarters to Beaverton, Oregon where they eventually opened their first retail store dubbing it “Niketown”.
It can’t be argued that ever since Kanye West partnered up with Adidas, the company has been getting a lot of hype. Since 2014, Kanye has been claiming that his Adidas Yeezy Boost line was more coveted by sneakerheads than Jordans. But now that he has surpassed Jordan brand, observers are starting to take note.
Most of them agree that one of the major reasons Nike has seen a decline is their lack of interest in running and basketball shoes. When it comes to the fall of Jordan Brand, fans were getting tired of the inundation of retro Air Jordans that the company has been releasing for the past few years. Each new release saw hundreds of thousands of sneakers flooding the market. There are only so many times you’ll empty your wallet for a new pair of retro Jordans.
However, no one truly knows why Adidas has been seeing so much success. Sure, you can say it’s Kanye, but Yeezys releasing in limited runs, it’s safe to say that Adidas’ bottom line hasn’t really been affected by Mr. West. But, you can’t disregard the “halo effect” that Yeezys have had on the rest of the brand. Now that Yeezys are so popular, Adidas as a whole is likely gaining more popularity as a result. Though that would be impossible to calculate numerically.
The all American company, Nike is no stranger to hype, and they’ve had some collaborations that had people talking. I’m taking Tom Sach’s Mars Yard 2.0, Virgil Abloh’s Air Jordan 1s and much more. When it comes to baseball, even the rather unpopular Air Jordan sneakers are beginning to make a comeback. In terms of hype, Adidas seems to have Nike beat, but the numbers don’t lie. Nike still has the sneakers throne.
When it comes to sponsorships, Nike has sunk their claws deep into a number of superstar athletes and they’ve been shelling out a ton of money in sponsorships. They have dominated nearly every sport there is. These include American football, baseball, basketball, boxing, cricket and much more both past and present.
Here’s a list of a few of the athletes Nike has sponsored (both past and present):
- Roger Federer (tennis) – $60,000,000
- Lebron James (basketball) – $54,000,000
- Tiger Woods (golf) – $45,000,000
- Kevin Durant (basketball) – $36,000,000
- Kobe Bryant (basketball) – $25,000,000
- Serena Williams (tennis) – $20,000,000
Adidas hasn’t been sitting idly by. They’ve also jumped into many of the same sports that Nike has and have been grabbing as many athletes as they can:
- Jayson Werth (baseball) – $200,000
- Novak Djokovic (tennis) – $34,000,000
- Lionel Messi (soccer) – $28,000,000
- Kobe Bryant (before Nike got their mitts on him)
- James Harden (basketball) $17,000,000
- Derrick Rose (basketball) – $14,000,000
- Jason Day (golf) – $8,5000,000
- Pharrell Williams (Music)
Keep in mind that these amounts are a combination of sponsors (not just Nike and Adidas), but generally speaking Nike tends to pay far more than Adidas when it comes to sponsorships. This list is in no way all conclusive. Between the two of them, Nike and Adidas sponsor hundreds of celebrities and athletes.
If you were to compare the two companies, there are a lot of factors to consider. Adidas has a lot more history than Nike. Having survived wars, depressions, and there’s the simple fact that Adidas has been around for longer than Nike. However, Nike has risen to take over the world in a relatively short time. They dominate the shoe market the world over and aren’t going to be rooted out anytime soon.
The future is uncertain for these competing shoe lines. Adidas certainly has the hype, but do they have what it takes to overthrow Nike? If the German manufacturer has anything to say about it, they absolutely do. Will it happen as soon as 2018? Realistically, probably not! But eventually, there’s an excellent chance they’ll force Nike to contend for the top spot sometime in the future, especially if they continue to double their market cap every year. We’ll see what the future holds for both Nike and Adidas.
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