Adidas has announced it is to terminate the IAAF -the International Association of Athletics Federations – sponsorship deal four years early.
The sportswear giant is the IAAF’s biggest sponsor.
Adidas informed the athletics’ world governing body of its decision – understood to be a direct result of the doping scandal sweeping the sport – last week.
The company has not commented, but the IAAF issued a short statement on January 25.
It made no reference to its deal with Adidas, revealing it was “in close contact with all its sponsors and partners as we embark on our reform process”.
Adidas is one of the IAAF’s official partners, along with Canon, Toyota, Seiko, TDK, TBS and Mondo.
According to several reports, Adidas informed the IAAF in November 2015 it was considering ending their relationship early after a report detailed claims of “state sponsored doping” within Russia.
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The report was compiled by an independent commission set up by the World Anti-Doping Agency (WADA).
Earlier this month, the commission’s chairman, Dick Pound, delivered a second, damning report that revealed “corruption was embedded” within the IAAF under former president Lamine Diack.
Within days, a decision at the highest level in Adidas was taken to terminate the relationship with the IAAF.
It is understood the German multinational believes the doping revelations in Dick Pound’s reports constitute a breach of its agreement with the IAAF.
The 11-year deal was signed in 2008 and due to run until 2019. At the time it was signed, it was reported the deal was worth $33 million.
The withdrawal of Adidas will come as a major blow to the sport – and to IAAF president Sebastian Coe – in a time of unprecedented turmoil.
The WADA reports on state sponsored doping have left athletics facing an Olympic year with major reputational damage to repair.
It is also facing a French criminal investigation into corruption, which is looking into the awarding of every World Championships since 2007.
It now seems Adidas believes there is too much reputational risk to its brand to continue its association with the IAAF.
Adidas has also expressed its displeasure at the corruption scandal that continues to engulf FIFA, although it remains world soccer’s governing body’s oldest commercial partner.
Adidas has announced that it will offer free design resources to the high schools that agree to drop Native American mascots.
The sportswear company has also offered to help pay for the costs of the changes.
The pledge comes on the same day President Barack Obama is hosting leaders from the 567 federally recognized native tribes in Washington.
The use of Native American mascots and symbolism in sports is at the center of a national debate in the US.
Critics say such imagery is racially offensive and it exploits native people through stereotypes.
According to advocacy groups, there are approximately 2,000 schools in the US that have Native American mascots.
Over the past two years around 12 have dropped the mascots and about 20 are considering a change.
Adidas, which will have executives in attendance at the White House Tribal Nations Conference, has also said it will be among the founding members of a coalition that seeks to change Native American mascots in sports.
The initiative would give schools wanting to change their mascot access to the brand’s design team, who would provide logo and uniform design services.
“This remarkable stand against racism by Adidas illustrates that the issue of ending the use of the R-word is not going away, but is instead gaining momentum as people understand the damaging impacts of this racial slur,” said Jackie Pata and Ray Halbritter, leaders with advocacy group Change the Mascot, in a written statement.
The Washington Redskins, the professional American football team located in Washington, has resisted changing its name and logo despite increased criticism in recent years.
“We’ll never change the name. It’s that simple. NEVER – you can use caps,” said Redskins owner Dan Snyder, in an interview in May 2013.
Supporters of the mascots point to long traditions and say that they highlight the contribution of native people to American society.
In 2005, the governing body of university-level basketball warned teams that they would be subject to penalties if they did not change Native American mascots.
In response, some of the teams, including the Florida State Seminoles, were granted permission to use the names and imagery by tribes.
Sportswear giant Adidas has reported “commercial irregularities” at its Reebok unit in India that could cost the firm up to 125 million Euros ($165 million).
Adidas said it is carrying out an internal investigation. “We will take further steps” when that process has been completed, a spokeswoman said.
The firm said the irregularities resulted in a change of leadership at its India business in March this year.
Two top executives at the Adidas Group in India left the company in March.
At the time the executives left, the Times of India said it had learned that the departures were linked to “swirling allegations of financial discrepancies and losses” at Reebok in India.
Adidas has reported "commercial irregularities" at its Reebok unit in India that could cost the firm up to 125 million Euros
While the company did not provide more information about the investigation into its Reebok business in India, it highlighted that there has been a management overhaul.
In the statement accompanying its first-quarter results, Adidas said: “Management assures its stakeholders that it has, and will continue to, vigorously pursue a course of action to protect the group’s interests, which has already resulted in the appointment of a new local leadership team in India at the end of March.”
“Under this new leadership team, management is further planning an accelerated restructuring of its business activities in India, including significant changes to its commercial business practices.”
“This could lead to additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to 70 million Euros.”
At the same time, the firm said first-quarter net income increased.
Adidas’ profit was 289 million Euros in the quarter, up 38% from the previous year, and it also raised its annual sales target. It now expects sales to rise 10% this year.