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.