Soccer Sponsorship

Hamburg Fans Bristle at Under Armour

St Pauli Jeremy Dudziak Imago
St Pauli's Jeremy Dudziak celebrates a goal against FC Union Berlin on Saturday.
  • Why it matters

    Why it matters

    It has been almost three months since the U.S. brand Under Armour committed to being the new sponsor for FC St. Pauli. But a newspaper article about the sporting goods label’s ties in the U.S. is outraging club fans.

  • Facts

    Facts

    • Under Armour announced its multi-year official technical sponsorship of FC St. Pauli in July 2015.
    • St. Pauli is known for being a multi-cultural team with a strong social conscience.
    • Fans are angry that Under Armour, according to U.S. media, has closed a deal for over $4.2 million with the U.S. military.
  • Audio

    Audio

  • Pdf

Under Armour? Never heard of it! That is how most Germans react when they are asked about the global sports-clothes brand from the East Coast of the United States.

In Germany, the label was mostly known only among serious endurance athletes – until this week, when a front-page story in the Hamburger Morgenpost asked whether the company is a suitable sponsor for second-league soccer team FC St. Pauli.

The article said that Under Armour is cultivating a martial image in its home market, providing apparel for hunters, police officers and the military, and is close to the weapons lobby. The club from the Red Light district in Hamburg, on the other hand, campaigns for peaceful coexistence, for multiculturalism and tolerance. Now the discussion, which has been rumbling for a while among St. Pauli fans online has ignited again. Many are harshly critical of the sponsorship deal.

A typical comment on Facebook goes: “I am appalled by your new sponsor.” Or: “I am incredibly disappointed in this decision and actually expect that you drop this deal.”

Under Armour is a major player in the United States, where it has beat German rival Adidas to second place in the sporting goods category.

The club is  sticking to the contract. Vice President Joachim Pawlik was at the Under Armour headquarters in Baltimore a while back, and was sold on the new partner. “We discussed things very openly and transparently,” Mr Pawlik said. “From both sides there was a palpable interest in getting to know each other and understanding one another.”

Under Armour is a major player in the United States, where it has beat German rival Adidas to second place in the sporting goods category.

The company has also been making its move onto Adidas’ home turf. Just a couple of weeks ago the CEO Kevin Plank and hundreds of guests opened the new German headquarters of Under Armour in Munich. The 43-year-old company founder said: “We want to become a truly global brand.”  That only works, he added, if Under Armour is successful in Germany as well.

The American company is investing in sports sponsorships as part of its strategy. This time around, it is not outfitting a premier league soccer team, as it did with Hannover 96 for three years running.

kevin plank_bloomberg
Under Armour CEO is attacking the German market with gusto. Source: Bloomberg

 

Now, the brand has selected the second league FC St. Pauli team – the club’s cult status is more important to Mr. Plank than great sporting success. “They fit our brand exactly,” he said at the end of July. Under Armour also cultivates the image of the underdog, battling the all-powerful competitors Nike and Adidas. Starting in the 2016-17 season, the Hamburg players will be wearing the jerseys with the U.S. brand.

Experts in the field are convinced that the Americans will find a place on the shelves despite their modest sponsorships. “They will continue accelerating,” said Jochen Schnell, management board member at the retailer Intersport. He said Under Armour offers the total package. “They are functional and have a good style,” he said.

So far, the brand has been relatively unknown in Germany, and had farmed out its representation to an agency. Setting up its own headquarters, which will be about 30-strong initially, should start to address the awareness problem.

Overall, Under Armour is still relatively weak outside of the United States, with the foreign share of its sales at only 11 percent. The company did not appear at all last year among the 60 largest suppliers of the German market-leading retailer Intersport.

But its position in specialty German stores should improve dramatically in the coming months. Mr. Plank has just signed an agreement for a shop-in-shop space in the Otto subsidiary Sport Scheck. Further deals are expected, Mr. Plank said.

Under Armour is a huge hit among athletes in the U.S. In the second quarter, the corporate sales rose by 29 percent to $784 million, or €713 million. But the expansion activity is costing a lot of money, and the already scant earnings fell again by 17 percent to just $15 million.

For the billionaire Mr. Plank, the contract with St. Pauli is just the beginning. “No deal is too big for us,” he said in Munich. That he will ever sponsor FC Bayern Munich is admittedly unlikely. Arch-enemy Adidas has a contract with the champion team until the end of the next decade.

 

 

Joachim Hofer covers the tech, outdoor and recreational sectors for Handelsblatt. To contact: hofer@handelsblatt.com

 

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