Mercedes-AMG PETRONAS' $30mm/year Adidas Partnership Shows Winning Not Everything

Mercedes-AMG PETRONAS’ $30mm/year Adidas Partnership Shows Winning Not Everything

“Winning isn't everything; it's the only thing,” Henry ‘Red’ Sanders (and Vince Lombardi) said. 

The legendary football coaches were speaking of the importance of the end result to a game or endeavor. Many sports industry leaders have since adopted the same belief in the context of wins and losses and their relative influence on an organization’s off-field success (or lack thereof). The logic has been if the team is not ‘winning’ then it is less marketable, and as such, it may not be able to generate the desired revenues or returns for potential partners. 

But the recently announced Adidas, Mercedes-AMG PETRONAS tie-up is the latest in a series of middling teams on the field/track/court/ice finding outsized partnership success off of it.

Mercedes once sat in F1’s pole position. It won eight consecutive Constructors World Championships (between 2014 and 2021) and seven consecutive Drivers Championships (between 2014 and 2020) with Lewis Hamilton in the driver’s seat.

The team has, however, fallen off since. It finished fourth in the Constructors Standings in 2024, and Hamilton left for rival Scuderia Ferrari. 

But that reality didn’t keep Adidas from agreeing to a multi-year apparel partnership with the team worth a reported $30 million a year, a large figure for a category partner. For perspective, MoneyGram’s title partnership with the MoneyGram Haas F1 Team is ‘only’ worth $20 million annually. 

Sure, there are some idiosyncratic elements to the outlying deal. Adidas is a German company, and Mercedes is widely considered to be Germany’s F1 Team (even though, its headquarters are in Brackley, England). 

Adidas CEO Bjørn Gulden is also a firm believer in sport as a marketing vehicle. He “steered a big comeback” during his tenure as Puma CEO, in part, by leveraging partnerships with teams and athletes. That company has multiple partnerships with F1 teams (Ferrari, Williams, and Alfa Romeo) and can be found as an official supplier of F1 apparel at several Grand Prix races.

And Nike was recently named the German Football National Team’s kit and equipment supplier, replacing Adidas after 77 years. One must assume that only made the F1 partnership opportunity appear more attractive (and financially viable) to Gulden and Co. 

However, it’s unlikely that any of these factors would have driven Adidas to invest in a multi-year pact at the level it did if it felt winning championships were an important variable in partnership performance. Adidas is instead betting that Mercedes can impact its business goals without returning to championship form on the track.

Gulden stated in the press release announcing the tie-up that “reaching new consumers and [having] a big influence on sport and street culture” were among the reasons the company did the deal. 

Remember, Adidas wasn’t in the sport before—even though F1 has a strong overlap with its current customer base (particularly, in growth markets). Sports Innovation Lab (SIL) found that U.S. based F1 fans are 43% more likely than the general population to spend on the brand.

It’s a fan base that has also been quick to embrace “sport and street culture.” SIL found the demographic is 269% more likely than the general population to shop at Kith, a popular New York City-based lifestyle ‘concept’ that sells clothing, accessories, and footwear (including Adidas products). 

Any questions about the believed overlap were answered in the wake of the partnership’s announcement. Zoomph found Mercedes’ X post announcing the deal reached 14.5% of the team’s total audience. For context, an average in-season post by the team typically reaches just 3.0%. 

And from a broader brand building perspective, F1 offers something that the German National Team could not provide—regularity. The Mercedes team will run at least 24 times this year. National Football Teams only compete in major competitions sporadically.

The consistent reach received is augmented by Netflix’s Drive to Survive. The series places a spotlight on drivers, often in an interview setting, making partner logos easier for television viewers to see than on race day. 

“Not only does the show drive meaningful incremental sponsor exposure, but across a fairly unduplicated audience with on average only 22% overlap between F1 race and Drive to Survive viewers,” Caryn Rosoff (SVP ports and Brand Insights, Klutch Sports Group). 

Of course, there are plenty of other examples of organizations across sports with sales and/or partnership teams that outperform their on-field counterparts.

The Dallas Cowboys haven’t won a Super Bowl since 1995, but the club still managed to bring $250 million in ’23 partnership revenue—$50 million more than any other NFL team. There are multiple reasons for their success, including dedicated efforts to;

• pursue partnerships with companies in direct competition to league level partners at the time of negotiation (see: American Express or Pepsico)

• hold numerous non-gameday and off-season events at AT&T Stadium (which increased partnership inventory)

• develop The Star, the team’s headquarters and practice facility in Frisco, Texas into a year-round destination

• turn ownership into one of the team’s highest profile stars

Skeptics will point out that the Cowboys are ‘America’s Team’. But few would describe the Nashville Predators that way, and according to SponsorUnited, the club managed to post the second highest number of partnerships deals in the NHL last year (152). That is despite a middle of the pack finish the year prior.

The team’s success in partnering with companies headquartered or maintaining a large presence in Nashville, including Bridgestone, Vanderbilt Health, Regions Bank, and Celero Commerce, has been noteworthy. As has its (and the Tennessee Titans’) efforts to engage the growing number of companies relocating to or establishing larger physical footprints in the city.

The NBA’s Utah Jazz have risen to second in the NBA in total partnership revenue, behind only the Golden State Warriors, with a similar strategy. The club has focused on aligning with businesses that have a large and/or growing employee presence in the state (see: Delta, America First Credit Union).

Winning can be a helpful driver of partnership revenues. It has the potential to spur increased fan engagement and brand interest. 

But winning is also a difficult factor to predict, and often beyond the organization’s commercial and sales teams’ control. Mercedes, the Cowboys, Predators, and Jazz are all proof that winning isn’t everything when discussing sports partnerships.

Organizations that consistently engage their fans and the local corporate community, particularly when the team is not performing to expectations on the field/court/ice/track will find the most consistent partnership sales success and ultimately be able to deliver the greatest value to partners.

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