Adidas attempting to end IAAF sponsorship deal early
By Paul Kelso, Sky News Sports Correspondent
Last Updated: 25/01/16 5:21pm
Adidas is attempting to end its sponsorship deal with the International Association of Athletics Federations (IAAF) four years early, Sky sources have confirmed.
The German sportswear and equipment company signed an 11-year contract with the governing body of world athletics in November 2008 which was estimated to be worth around £5.6m a year.
However, Adidas now wants to end its backing after only seven years of the deal and the company's lawyers have contacted the IAAF claiming that the recent doping revelations constitute a breach of contract.
It is understood the IAAF will resist this claim and negotiations between Adidas and the IAAF are ongoing.
While Adidas may terminate the deal, it is understood there will be no direct financial implications for the IAAF as the deal is part or a wider marketing arrangement with Japanese company Dentsu.
The IAAF has sold all its marketing and sponsorship rights to Dentsu, which then sells them on to sponsors and commercial partners. Should Adidas terminate the deal without having to pay up the remaining four years, Dentsu will bear the cost.
The reputational damage of a blue-chip company walking away from athletics in Olympic year will remain however.
Adidas, meanwhile, has faced intense investor pressure in Germany amid slowing profits and declining market share in the face of competition from rivals Nike and Under Armour.
In a statement Adidas confirmed it is in talks with the IAAF: "Adidas has a clear anti-doping policy in place. Therefore, we are in close contact with the IAAF to learn more about their reform process."
The IAAF said: "We are in close contact with all our sponsors and partners as we embark on our reform process."
The IAAF became engulfed in a doping and corruption scandal in November last year after an independent commission for the World Anti-Doping Agency (WADA) made claims of widespread, state-sponsored doping in Russia.
Earlier this month the commission revealed corruption by the IAAF's former president Lamine Diack and his son Papa Massata Diack, employed as a marketing consultant, who it said were complicit in covering up doping cases.
As marketing consultant Diack Junior was responsible for the IAAF's commercial relations including those with Adidas and Dentsu.
Lord Coe has replaced Lamine Diack as IAAF president and has unveiled a "reform roadmap" with a 10-point plan to rebuild the IAAF and the sport itself.
A statement from Dentsu read: "We have full confidence in the new leadership of the IAAF and the reform process being led by current IAAF president Sebastian Coe."