Eight by Eight’s Andrew Helms reports on the storied company’s attempt to enter the cutthroat waters of the global football market
This past February in New York, London, Tokyo, and Sydney, New Balance, the 106-year-old American sportswear giant, launched its campaign to become a top player in the global football marketplace. Featuring an impressive slate of Premier League footballers including Vincent Kompany, Aaron Ramsey, and Jesús Navas, New Balance’s investment signaled its intent to court fans away from the titans of the industry, Nike and Adidas, and was another sign of the sport’s growing global omnipotence.
“If you’re going to be a top athletic brand in the world, you have to be in football without a shadow of a doubt,” said Richard Wright, General Manager of New Balance Football in an interview with Eight by Eight.
But the launch generated as many question as it provided answers. For the traditional American brand best known for running shoes, entering the waters of global football is a pricey and uncertain proposition. “Football fans are very conscious of heritage,” said Andrew Walsh, Director of Enterprise Services at Repucom, a global sports marketing research firm. To win over finicky football fans, New Balance must cultivate authenticity, loyalty, and innovation in this crowded marketplace.
For New Balance, it’s their second, and likely final, chance to get it right.
In 2010, five years before the launch of New Balance Football, executives inside the company started plotting their entrance into the world’s game. They settled on subsidiary brand Warrior, best known for lacrosse gear, as their vehicle into the marketplace and hired Wright to lead the operation. A longtime veteran of the football industry, Wright had worked with Nike, Adidas, Reebok, and Umbro before joining Warrior and its parent company New Balance.
In 2011, Wright and Warrior signed Liverpool F.C. to a then record-breaking £25 million per year kit deal, a major coup for the upstart brand and one that owed much to New Balance’s existing relationship with Liverpool owner John Henry, who also owns the Boston Red Sox, a New Balance partner.
Despite the initial fanfare surrounding the deal, Warrior’s time with Liverpool did not come without controversy. In 2012, some Liverpool fans were angered by the decision to adopt the Liver Bird crest, moving the eternal flames that honor the 96 victims of the Hillsborough disaster to the rear of the shirt. Many also expressed dismay at the avant-garde patterns on Liverpool’s away and third kits.
Inside the football industry, many analysts were just as baffled at the decision to let Warrior lead New Balance’s push into football. According to market expert Walsh, “it was a little bit odd” for New Balance to invest so much money into a kit deal and then allow a sub-brand like Warrior to benefit from the exposure of being associated with Liverpool, a club that traditionally has one of the top-selling kits in all of world football.
Despite the criticism, Wright and those inside New Balance consider Warrior’s brief flirtation with football a success. In our conversation, Wright cited record shirt sales for both Liverpool and Portuguese club Porto as totems of Warrior’s ability in the marketplace. “In the two years that the brand has been with the consumer, Warrior is now mentioned in the same breath as Adidas, Nike, Puma, and Umbro,” he stated. “So Warrior for me was a big success in launching the brand globally and in launching into football.”
But after several years it became clear—inside and outside of New Balance—that Warrior should cede football to its better-known parent. “There was nothing wrong with the Warrior brand at all,” said Wright. “It’s just the speed of growth can be accelerated to a greater degree with New Balance than with Warrior.”
For Walsh, the decision to relegate Warrior will allow the company to leverage New Balance’s existing “credibility and awareness in the marketplace.” He added that with New Balance, “They’re already starting from a better place.”
With the launch behind them, New Balance plans to have products reach store shelves this summer, catering to football’s cutting edge with technically advanced boots and designs. “I know it’s a team sport,” said Wright. “But there’s always one or two players in the team who will look to be different. And once you got those guys, then you’ve got a chance through word of mouth in the changing room.”
For experts in the marketplace, it’s a sound tactical approach. According to Edward O’Hara, senior partner and chief creative officer at SME, a brand management firm that helped bring MLS into the David Beckham era with the campaign, “Football, Fútbol, Soccer,” New Balance, as a challenger brand like MLS, will need to look and think young to compete.
“If you go after the Nikes and Adidas of the world, you’re throwing away hard-earned money,” said O’Hara. Instead, O’Hara suggests that New Balance court “Generation Z,” made up of young people under twenty and raised on Instagram and Snapchat. “I think the biggest mistake they could make is being number three with millennials. They need to be number one with Gen Zs.”
To court Gen Z, New Balance will need to make smart sponsorship decisions and hope to get lucky. “The only way to make an impact is to speculate on the future,” said Repucom’s Walsh. New Balance should “sidle up to some up-and-coming starlets and hope that one of them becomes the next Messi or Ronaldo.”
This strategy is also dictated by necessity: New Balance cannot currently afford to enter into a sponsorship arms race with Nike or Adidas. Last year, New Balance posted $3.3 billion in total revenue, with only a small fraction coming from its football division. The same year, Nike’s football operation earned $2.3 billion alone, while Adidas’ earned an estimated $2.7 billion.
In Europe, New Balance plans to approach the market with a few more big name signings. They’ve recently added Celtic to a client roster that includes Liverpool, Porto, Stoke City, and Sevilla. Through Wright declined to provide specifics in our interview, he did mention that New Balance’s signing spree was not yet over and that the company planned to sign several new players and clubs ahead of the next European season.
In the United States, Major League Soccer’s close relationship with Adidas makes it “impossible” to sign an MLS club, according to Wright, so necessity requires a grassroots campaign that will target youth leagues and young players. “Globally, we’ll conduct ourselves on a local basis,” he summarized.
Despite these efforts, it will still be difficult for New Balance to take down the market leaders, who are almost certain of a top two finish every season. Coincidentally, it leaves New Balance and their best known partner, Liverpool, fighting for the same thing in the near future: third place. According to Walsh, “They’re almost aiming for a Europa League position, and maybe once they achieve that platform they can think if it’s worth trying to add a little more investment to keep chipping away at Adidas or Nike.”
If New Balance is successful in football, the returns for the company could be immense. “It’s not really about soccer,” said O’Hara. ”It’s really about the globalization of the product and services.”
For New Balance’s Wright, the chance to lead New Balance into football is a career-defining opportunity. “That’s the beauty of sports, isn’t it,” he said, “You’ve always got a chance.”
Follow Andrew Helms on Twitter @andrew_helms