Germany Had More Than Two Brands Offering for the Kit Deal

The German Football Federation (DFB) received a lot of criticism (of which much was unjustified) for signing a deal with Nike. In an interview with German news magazine Stern, Stephan Grunwald, the treasurer of the DFB (German Football Association), explained the reasons behind the decision to change kit suppliers after seven decades.

Bidding Process For Germany Kit Deal Was Just Completed This Week

Grunwald mentions that for the first time ever, a transparent tendering process was conducted for the supplier contract, which resulted in significantly different offers from Nike and long-time partner Adidas. According to Grunwald, "the offers from Nike and Adidas were so far apart that [the DFB] had no other choice than signing with Nike. Reports are suggesting it could be double what Adidas was paying, though specific figures were not confirmed (50 million vs 100 million Euro).

Despite speculation about the exact figures, Grunwald neither confirms nor denies the amounts mentioned. Grunwald addresses the criticism surrounding the switch to a US company, stating that choosing Adidas solely based on the long partnership would have raised legal concerns. He emphasizes that the decision was made based on economic factors and the need to avoid putting a third party at a disadvantage.

We have extracted the two most interesting parts of the interview for us, which include four important things. First, he mentions France, which also conducts a tender for its new kit maker, suggesting that there could be more switches. Second, he states that there have been more than two brands (but does not mention which). Third, he reveals that the bidding process was just completed this week. Fourth, Adidas had no matching clause.

Stern: Mr. Grunwald, the DFB had already received an offer from Nike in 2007 that would have brought in significantly more money than that of long-time partner Adidas. At the time, the association turned it down. Why did you decide differently today?Stephan Grunwald: The process started at the end of January, and we provided extensive documentation to all market participants. You can imagine it's like the public sector. Even though the new contract doesn't run until 2027, we had to go to the market with the procedure so early because other associations, such as the French, are also about to launch their tenders. It is therefore also important for sporting goods manufacturers to know in good time how they will position themselves in the overall market. In the case of the DFB, the bidders submitted their offers on March 15, and the companies were then able to give presentations to us this week. Incidentally, there were more than two bidders. In the end, we had to decide which was the best offer in economic terms. The bids from Nike and Adidas were so far apart that we effectively had no choice.

Stern: Would Adidas still have had the opportunity to improve the offer? In the past, the DFB had so-called matching clauses, where the regular partner could counter other offers.Grunwald: As mentioned, the bids had to be submitted last Friday. In such tendering procedures, the question is always how far apart the bidders are. If the gap is ten or 15 percent, for example, then renegotiations may well make sense - but not on the scale involved in this case.

Grunwald also explains that the bidding process was just completed this week and that the unfavorable timing of the announcement was made to inform relevant parties promptly, as contracts could affect stock prices of the involved companies.

Read the full interview on Stern's website

Was it Germany's right decision to sign with Nike and announce the kit deal in the same week the new kits were released? Let us know in the comments below, and read the full interview on Stern's website [German].