German sportswear company Adidas AG is to end its 11-year sponsorship deal with the International Association of Athletics Federations (IAAF) almost four years early, according to media reports. Grace Pascoe reports
Another blow for Sebastian Coe. Adidas may be abandoning the IAAF After the athletics' world governing body - which he is President of - became embroiled in a doping scandal. The German sportswear giant has reportedly cut its 11-year sponsorship deal - FOUR years early. Despite it being worth around 33 million euros. Matthew Beesley of Henderson Global Investors thinks competition may be playing a part too. (SOUNDBITE) (English) HENDERSON GLOBAL INVESTORS, HEAD OF GLOBAL EQUITIES, MATTHEW BEESLEY, SAYING: "Adidas has been a company that has generally lagged Nike both in terms of profitability returns and indeed growth. So the opportunity for Adidas to steal a march on Nike under new leadership, perhaps reposition itself away from some of these controversies as relates to athletics, clearly could be quite meaningful." Adidas apparently considers alleged corrupt practices a breach of contract by the IAAF. And the move could cost it tens of millions of dollars in revenue. But some are questioning why Adidas has stuck with FIFA after its leadership scandal. (SOUNDBITE) (English) HENDERSON GLOBAL INVESTORS, HEAD OF GLOBAL EQUITIES, MATTHEW BEESLEY, SAYING: "Athletics, while important as a business, is a business that some companies like Adidas could indeed perhaps contemplate stepping away from. Whereas football is a business that quite frankly is far too important for anybody to turn their nose up at." The World Anti-Doping Council last week released a follow-up report on its investigations Accusing the IAAF of having "embedded corruption" at the very top of the organisation under former president Lamine Diack. As yet neither Adidas nor the IAAF have confirmed the sponsorship split.