Fluminense presented today its new uniforms for the dispute of the Brazilian Championship, which this time are made by the American Under Armour. What draws attention in this news is that it resembles an event from last year, when the tricolor carioca also presented uniforms from a then new partner, Dry World. At the time, the club left a partnership of almost 20 years with Adidas to sign with the young Canadian company, in a five-year agreement with amounts that would reach R$ 110 million in total.
The reality turned out to be very different from what it seemed, however, and the partnership was marked by several problems. Dry World delayed payments for several months, had difficulties in distributing the products, the quality of the uniforms produced was questioned by fans and managers, and the teams from the base divisions and the women's volleyball team simply did not receive the appropriate material, and continued wearing Adidas uniforms. The result was the termination of the contract long before its end, which led to the aforementioned agreement with Under Armor this year.
Cases like this show the difficulties and frivolities that Brazilian clubs have in choosing and in the relationship with their suppliers of sporting goods. The Dry World case itself was not limited to Fluminense. Goiás and Atlético-MG also signed with the supplier in 2016, they had the same problems, and both today have already replaced it with Topper.
The Minas Gerais club, by the way, has had many complications in maintaining the same supplier in recent years. Since 2010, there have been no less than 5 brand changes on the club's shirt, with dubious choices being recurrent. In 2013, the club switched from Topper itself to Lupo Sports, aiming for a more profitable two-year deal, but the company ended up having problems with supply, distribution and even put defective shirts on sale. Years later, with Dry World, the club bets again on a new company that promises a large payment, but fails to meet basic requirements for providing the service for which it was hired.
Figure 1 – Atlético-MG changed supplier 5 times in 7 years
Source: Camisas e manias, Netshoes, Centauro, Futebol T-shirts and UOL
Many must think that the relationship with a supplier of sporting goods is different from that of a common supplier, as we see in several logistical activities, after all, in this case, it is the supplier company who pays for the contract. This is not exactly true, as most of the values that manufacturers offer to clubs refer exactly to the supply of sports materials. Flamengo, for example, signed at the end of 2012 a contract worth more than R$ 35 million per year with Adidas. More than a quarter of this amount (R$ 9,8 million) was delivered through the supply of more than 90 pieces for use by the club's sports departments. That is, the clubs actually buy the pieces, but the acquisition value is less than the licensing of the team's brand by the supplier. In addition, the supplier also has the responsibility of delivering the shirts and other products to the fans of the associations, in exchange for earning most of the sale value.
Other recent cases of friction between Brazilian teams and suppliers involved Nike and three other clubs. In 2012, the American company wanted to expand its partnerships in Brazilian football (previously restricted to Corinthians and CBF) and at once closed agreements with Internacional, Bahia, Santos and Coritiba. It turns out that only with the first was the partnership signed directly. With the others, the relationship was made by Netshoes, the largest online store of sports products, which produced and distributed uniforms with material and design by Nike. This intermediation model received some criticism from these clubs, mainly due to the distribution to other retailers, and the lack of special treatment by Nike, which designed uniforms without much customization, with great similarities to other clubs served by the brand. Today, Nike still has relationships with the CBF, Corinthians and Internacional, but no longer with the other three. Santos, by the way, due to these problems, decided to manufacture, distribute and sell its parts (which are only designed by the Italian Kappa). This innovative model, however, has proved to be very unprofitable for Peixe, indicating that it is still better to have a supplier than to take a risk on a business in which the club has no experience.
Figure 2 – Nike announcement of new partnerships in 2012, with Internacional, Santos, Bahia and Coritiba. Only the one with the Gaucho club continues to this day.
Source: Nike
The exchange of suppliers seems in fact to be a more accentuated characteristic in Brazilian clubs. Since 2006, the 12 main clubs in the country (from RJ, SP, MG and RS) have changed brands 32 times and only Corinthians has not had any change. The 12 highest earning clubs in the world last year (all European) made only 15 supplier changes in the same period, and four of the six biggest did not change them. It is an indication of the difference that exists in the way European clubs manage their contracts, and manage to create much longer partnerships, capable of generating greater results, both for the company and for the club. It is not even necessary to change continents to make the comparison, since even in our neighbor Argentina, its two main clubs, Boca Juniors and River Plate, have been using Nike and Adidas, respectively, since the last century.
Figure 5 – Comparison between supplier changes in the main clubs in Brazil and Europe
Source: Own elaboration
The last case worth mentioning is that of Vasco da Gama with Champs in 2008 and 2009. The club bet on a partnership with the Brazilian company, new to the market, but it was unsuccessful. The first shirts presented were publicly criticized by the president of the club and by fans (because they did not have the cross band, which is a symbol of the team) and new ones had to be provided, the pieces were of poor quality, promised products were not launched, several delays in delivering material to the club, the company was unable to distribute uniforms to stores with an adequate level of service (incidentally, parts distribution problems could render a post on its own) and delayed contract payments. Socks with the team's name were also sent to another partner club of the company, Vitória-BA, which were even used by the Bahian team's goalkeeper, as they were the only ones available. Years later, the owner of the company would still be arrested, accused of embezzlement, and the supplier ceased to exist, and even though it no longer had involvement with Vasco, the brief partnership with the club from Rio de Janeiro was remembered in the journalistic articles of the case, which did not it is exactly good for the image of cruzmaltino.
Figure 6 – At the top, new uniforms rejected by the crowd. Below left, the confusion of sending socks to other clubs. On the right, a police case recalls the former partnership
Source: Netvasco, Globo Esporte, Lancenet
What is seen in Brazilian clubs is that managers often seem to look only at the figures in the contract presented and forget about everything else, such as the capacity of the company that is proposing the offer to meet the needs of the team in material for training and games, the experience in the Brazilian market for trade and promotion of the club's official products (which generate revenue from royalties), the expertise in design and technology of uniforms to please players and fans, the values of the brand that will be alongside the club's crest , the ability to manage official stores, and to promote new sales, promotion and relationship platforms that maximize gains for both.
These events in the world of football can teach several lessons about management and relationships with our suppliers. In the same way that clubs must pay attention to several factors when selecting a partner, all companies also have to be equally careful and detailed when negotiating new collaborations. It is necessary to look not only at the amounts being negotiated, but at everything that involves the two potential partners, such as service level conditions, means of communication, other costs that may be hidden, the financial situation of the company that wants to be contractor, previous experiences, contractual guarantees for proper fulfillment of the negotiated, in addition to the ethics, compliance and sustainability policies of the company that will be associated with your business. This complete view of the partnership is a topic often addressed in our courses on shopping and supplies, and it is fundamental for building longer and more valuable relationships, and for avoiding termination traumas, legal disputes and unnecessary efforts and expenses with constant supplier changes.
And your company, do you have a pool with your suppliers or have you scored own goals?
References
http://www.lance.com.br/santos/fabricacao-propria-nao-rende-peixe-lucra-700-mil-com-uniformes.html
http://espn.uol.com.br/noticia/397053_camisas-copias-de-europeus-da-nike-enfurecem-clubes
http://www.otempo.com.br/superfc/atl%C3%A9tico-reduz-contrato-com-lupo-para-um-ano-1.689246
http://maquinadoesporte.uol.com.br/artigo/eurico-reclama-da-nova-camisa-do-vasco_6923.html
https://www2.deloitte.com/br/pt/pages/consumer-business/articles/Deloitte-Football-Money-League.html
Fernando Chalréo
He has been working on consulting projects in Logistics and Supply Chain for 5 years, with experience in companies in the consumer goods, retail and food and beverage sectors. Types of projects already carried out: Sales & Operations Planning, Inventory Management, Network Planning, Business Process Review, Logistics Indicators and Transport Management
