Adidas Just Had A Kardashian Moment? That's What Gadfly Says

Adidas AG (ADR)ADDYY had a Kardashian moment, Andrea Felsted wrote on a Bloomberg Gadfly column. http://www.bloomberg.com/gadfly/articles/2016-05-12/chelsea-adidas-split-part-of-football-s-kardashian-moment The column says German company Adidas is pinning its hopes on a gang of "soccer galacticos" from Lionel Messi to Gareth Bale after "it's done it with Kayne West." Felsted noted the Adidas announcement to end a sponsorship deal with Chelsea Football Club six years early, and would receive a 50 million euro ($57 million) payout. "While the "mutual decision" was determined in part by the London club's desire for an even more generous benefactor, it comes as Adidas is slashing the number of sports teams it sponsors," Felsted wrote. The columnist said Adidas is under pressure to boost an operating margin that's well below those of rivals Nike Inc NKE and Under Armour Inc UA, thereby making the selection all more crucial. Nike has individuals as brand ambassadors, while Under Armour has Jordan Speith, Andy Murray and Stephen Curry in its list. The columnist also pointed to a estimate from John Guy, an analyst at Mainfirst, saying that ending the Chelsea deal would have cost Adidas 390 million euros over 10 years, gives it more firepower to invest in superstars like Messi, Bale, Luis Suarez and Paul Pogba. "The Adidas portfolio pruning does suggest even more money will go to an already entrenched elite of clubs and players. Yet with the high-spending Chinese increasingly bedazzled by the football circus, there's sure to be plenty more bread to go around," Felsted added.
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