Monthly Archives: February 2016

FIFA elections and Adidas, an afterthought

In my last post I speculated that the FIFA elections would leave their mark on the stock of Adidas. The idea was that Adidas is one of the main economic beneficiaries of close business relationships and sponsoring with both the German football association and FIFA itself.

How did this prediction fare? Well, the stock indeed took a minor hit (some 0.8% from 25th to 26th), so one might say my prediction was right. But the drop could also have been due to economic fundamentals. On Friday, it relatively soon became clear that the Swiss candidate would become the new president. (Which, in itself, is rather ironic, since it was another Swiss, Joseph Blatter, who brought about the mess.) I would have expected this to be more of a relief for sports companies. After all, an election of the betting markets’ favourite, the Bahraini Salman Bin Ibrahim Al-Khalifa (odds checker had him at 4/7 before the elections), could have put FIFA at a serious risk of breaking up. It would have been very difficult for UEFA to accept such a candidate, knowing its human rights record and financial influence. Well played then, Europeans, you just renewed Blatter’s strategy by buying off national associations in poor countries massively. My prediction was arguably too naive and needs to be revised.

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FIFA elections and Adidas

So who will become next FIFA president, Sepp Blatter’s former Lottofee (kind of the equivalent of the women that stand next to the wheel of fortune) Gianni Infantino or notorious human rights offender Bahrain’s Salman Bin Ibrahim Al-Khalifa?

I don’t know, but it will be interesting to see if Adidas, as FIFA’s main sponsor, has distributed its bets evenly, or if it has taken sides. I will definitely watch the Adidas stock tomorrow (something which I don’t normally do, since I don’t own any.). Why? Because in the last couple of years, though the FIFA and German Football Association scandals did not really affect profitability in the long run, there always where small dents in Adidas’ stock price. When 7 FIFA officials were arrested in May 27, 2015 the stock immediately fell by some 5 percent. When the German FA scandal broke loose in which former Adidas boss Louis-Dreyfus was implicated in buying the 2006 World cup, the stock also fell by some 50 cents. It’s hard to trace causality here, the stock is going strong again from August onwards (investors seem to be frolicking about Adidas’ role in the 2016 European Cup etc.), but watching the stock could reveal some interesting aspects about the underlying political economy of FIFA corruption.

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Assistant professorship in comparative political economy at CEU Budapest

For more information see here: http://politicalscience.ceu.edu/article/2016-02-02/job-call-assistant-professor-comparative-political-economy

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