Where does economic sanity end and madness begin? Football Leaks Reveal a Very Dark Side of Adidas

Adidas – a world-famous company and one of the largest manufacturers of sports equipment in the world. However, according to Football Leaks, the company has a very dark side, especially when it comes to cash flow and business practices. But you’d better read it for yourself…

Football Leaks was founded in 2015 and their attacks on clubs and third parties have been uncompromising. The whistleblower group has been known to the public since 2016, sending all stolen material, original contracts, exit clauses or cash flows to the German weekly Der Spiegel.

We’ve already tried to remind you on our website, through several articles, just how despicable the backstage of world football can be.

We wrote, for example, about Cristiano Ronaldo’s big scandal regarding tax fraud or the abuse of offshore companies. We also have an article focusing on the TPO model, or third-party ownership, which is linked to the sordid rise of Germany’s Hoffenheim.

Now, based on information from the book itself and Der Spiegel, we would like to pull out how Adidas in particular moves or has moved in the football world.

Few would probably think that the financial imbalance between the elite teams and the rest of the world is not created by the revenue from the European Cups, but by the manufacturers of sports equipment. And it is indeed interesting that despite UEFA’s efforts to keep a tight grip on the financial flows, nothing has been written, or indeed written in the past, about the massive support of these companies.

Yes, we can find basic information on the various portals regarding the contracts concluded. But no one voluntarily tells the fans of a particular club that, for example, according to the new draft contract between Adidas and Real Madrid, which was due to come into force in 2024, Adidas was to share 22.5 per cent of the club’s net revenue from the worldwide sale of Real Madrid products.

In turn, Adidas was to pay Real a whopping €70 million each year as part of the partnership. And other bonuses, ranging from €2.5 million to €7 million, come into play for excellent sporting results. It depends on whether it is a championship title or a Champions League championship.

And here is the main difference. Because if we look back at the clubs in the German Bundesliga, the second most attractive team in Germany (Borussia Dortmund – ed.) received an estimated eight million euros from their jersey manufacturer (Puma) in the 2015/16 season!

And to give another example, the Spanish big club has surpassed the annual turnover of clubs such as Hertha Berlin or other participants in the top German competition with this partnership alone.

However, there is one other remarkable thing in the original contract. It was supposed to be a one-off payment to Real Madrid, to the tune of €40 million! Even stranger, this payment was to be handed over in cash.

Real had already collected a similar payment from Adidas in 1998, but then the transaction was not in euros but in dollars. As we write above, a lot of unfair practices have come to light thanks to Football Leaks.

The Spanish daily AS, the Goal server and the German Der Spiegel have also written about this topic. However, Real’s management did not want to comment on this fact.

When asked by Football Leaks about the above-mentioned contracts, the Spanish club’s representatives only said that the published data is based on information that was obtained illegally.

What also largely detracts from the credibility of the company’s operations is the fact that Adidas has maintained very close ties with powerful figures in world football for decades.

However, such figures have either ended up in jail for tax fraud (Uli Hoeneß) or have been dragged through the press like FIFA president Joseph Blatter. One can also certainly mention the very close relationship with Franz Beckenbauer, who lost his reputation as a result of the scandal concerning the allegedly bought hosting of the 2006 World Cup.

It’s also no secret that Adidas contracts many football stars in addition to clubs. However, it is not Adidas but its subsidiary Adidas International Marketing B.V., based in Amsterdam, that pays the money into the players’ accounts.

Better said, Adidas International does not send these funds directly to the players’ accounts, but to companies to which professional footballers have transferred their personality rights, so-called Image Rights. The reason, of course, is nothing other than to reduce the tax burden.

The fact that in many cases these are offshore companies, as in the case of Ronaldo, is just the icing on the cake.

The Football Leaks documents contain dozens of contracts between Adidas International and the biggest stars in world football. After all, as we all know today, Lionel Messi was tried for tax morality in recent years.

We are talking about the years 2007 to 2009, when, according to documents from the Barcelona public prosecutor’s office, Adidas International transferred four million euros to two companies called Sports Consultants and Jenbril respectively.

The reason was that Adidas wanted to use the Argentine superstar for its advertising campaign. The first named company was based in the state of Belize, the second in Uruguay, with Jenbril being controlled by Messi’s father Jorge.

Both players were subsequently found guilty, mainly because they concealed these transactions from Adidas from the Spanish tax authorities and failed to pay tax on them.

However, the German conglomerate would not comment when asked whether it was part of the manufacturer’s responsibility to refuse to enter into a contract with a company located in a tax haven country.

Adidas has also entered into notable contracts with other well-known names. However, even these have had their finances transferred to their ‘corporate’ accounts. What names are they? Kaká, Juan Mata or David de Gea.

Perhaps the only player who has refused this partnership is Gonzalo Higuaín, for whom it is said that this contract would have detrimental consequences. However, despite his claims, he subsequently signed a contract with Nike. It should be noted that we can find a lot about this company in the Football Leaks documents as well.

It is very clear to us that most fans will be left wondering about various issues after reading the article. We also probably can’t even imagine what all must continue to go on behind the curtains of such a huge show called football. Football Leaks has taken care of the biggest leak in the history of football, probably in the history of the sport as a whole.

They have led to criminal prosecutions against dodgy companies, the financial authorities have targeted the business practices of Europe’s biggest clubs, and Football Leaks has also made a big mess of FIFA and UEFA.

Finally, I would like to note that Adidas is once again a significant partner of Sparta Prague. However, let’s hope that there is nothing else here besides the working partnership that Football Leaks would find worth publishing in the future and that would probably significantly damage Czech football.

Source: Football Leaks