How Nazi Brothers Changed Sports Marketing Forever

Adidas vs. Puma. Two brothers. One town. A feud that changed sport forever. Adolf and Rudolf began as partners, cobbling shoes together in central Germany before a family fallout split them into bitter rivals. What followed was decades of corporate warfare, played out on the world's biggest stages, that transformed sports marketing into one of the most powerful industries of the 20th century. Howe We Got Here Hosted on Acast. See acast.com/privacy for more information.

• 0:00Speaker 00

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• 0:44Speaker 00

  IG Australia, P T Y L T D, A F S L 515106. Finding the right home loan isn't easy and with so many options out there, it can be hard to know where to start. But when you start with Mortgage Choice, you get more. For starters, you get more choice. They help you compare market leading rates from over 35 lenders. And with more than 1,000 brokers Australia wide, expert help is never far away. To get more from your home loan, choose Mortgage Choice. Talk to your local Mortgage Choice broker today. Okay, sorry for keeping you waiting. Dasler Brothers, let's do it. What's your name? Rudolph. And yours? Adolf. Come again? Adolf.

• 1:27Speaker 00

  And your brothers who own a sports shoe company, but now you want to go your separate ways? Correct. And why is that? Aside from him being a total wanker, I'm pretty sure he got me conscripted into the war. Prove it, bitch. Fuck you, fuck you. Hey, hey, hey, let's work through this together. Now, just confirming, you've both been members of the Nazi Party? Yeah. Oh, big time. Yeah, yeah. Will that be a problem? No. I just have to make a note of it. Literally no one's going to care in a couple of years, like, like at all. Sweet. Yeah. So what are we going to name these new businesses? I'm going to call mine Addy Das for my name. Adolf Dasler. Addy Das. I was going to do Rudolph. Rudolph Dasler. Rudah. This guy stole my idea, so it's good. So I think Puma, Puma, Puma?

• 2:08Speaker 01

  Yeah.

• 2:08Speaker 00

  Okay, what happens once you're separate? We were thinking about aggressively bidding against each other for exclusive talent rights in soccer, basketball, track and field, boxing, kind of everything, really. Yeah, it'll help make sports marketing one of the most lucrative businesses of the 20th century. So this vague but intense Nazi feud is gonna make athletes rich well into the future at your expense.

• 2:31Speaker 00

  Wouldn't happen if he wasn't such a dick. Fuck you, man. Fuck you. Okay.

• 2:38Speaker 00

  It's weird how quickly being a Nazi business stopped mattering. I mean, maybe we put it in a different and lower mental category of guilt. Or, I don't know, maybe we just don't know because marketing teams divert the attention away from that stuff. And I guess that's probably more likely. I mean, if you wanna find out who designed the Nazi uniforms, you have to go look it up. Hugo Boss, by the way. That's never gonna be something that the current Hugo Boss management talk about. Nevertheless advertised. More people probably know that Mercedes-Benz and Volkswagen made the cars during the Nazi regime, but it's certainly not brought up by those businesses much, if at all.

• 3:22Speaker 00

  I just actually just found out that Maggi, you know Maggi noodles? They were a Swiss business and they were all in. They made the soups for the Nazi army with an exclusive contract. I never knew that. The list of businesses that thrived under Hitler is actually pretty long. And right there on it, you find the guys that started Adidas and Puma. Brothers Rudolph and Adolf, which, I mean, I think the name is a little bit of a dead giveaway. Actually, when I was a kid, I heard that Adidas stood for All Day I Dream About Sport, A D I D A S. But, you know, it's way simpler than that.

• 4:02Speaker 00

  It's the A D stands for Adolf, which is kind of wild, which, I don't know. Rob? Did you know that the AD in Adidas stood for Adolf?

• 4:14Speaker 01

  No, this is news to me, but does this mean when I put on my Adidas, I can say that I'm putting on my Adolf?

• 4:20Speaker 00

  Yeah, I think you probably could. People might look at you a bit funny, but it's not incorrect.

• 4:25Speaker 01

  Nah.

• 4:26Speaker 00

  I mean, this is the whole thing. It's like, it's a portmanteau. It's two words joined together. It's like, like, like jeggings or glamping.

• 4:34Speaker 01

  Or podcast.

• 4:35Speaker 00

  Podcast?

• 4:36Speaker 01

  Yeah.

• 4:37Speaker 00

  iPod broadcast, right?

• 4:39Speaker 01

  Podcast. That's it.

• 4:40Speaker 00

  Yeah, I never knew that one either.

• 4:42Speaker 01

  Yeah.

• 4:42Speaker 00

  But this is what we're dealing with. This is the whole Adidas of it all. And I don't know. I mean, I never knew that.

• 4:48Speaker 01

  I guess they wouldn't want to publicise it too much. There might be some people who are keen on that, but I would imagine most people, when they put on their Adidas, they don't think about the origins of it.

• 4:58Speaker 00

  Yeah, they'd be going for a more specific audience if they were making it very public, wouldn't they?

• 5:02Speaker 01

  Yes.

• 5:04Speaker 00

  But it's right there in the origins. It's funny to me how, how far past that we all can look or be told to look. But this is kind of brings us to the whole point of this episode, which is that Adidas and Puma basically started all of this sports marketing, the idea of which brand of shoe you and the athletes you like associate with. I mean, that was them. They did that. And the story is incredible. It's one of the most bonkers and important family feud stories of the 20th century. And before we get into the whole story, I want to plant three facts in your head. Two truths and a lie, right? There's two truths, one lie. See if you can work out which is which as we go.

• 5:48Speaker 00

  And I'll tell you at the end, obviously. Fact number one. So this is, you know, potentially a truth. Pele, Pele, Rob?

• 5:55Speaker 01

  Yeah, Pele.

• 5:56Speaker 00

  Pele, thank you. You keep me honest on these things. Pele was once paid specifically to tie his shoelaces during a World Cup match. It was part of his contract, right? So that's fact number one. Fact number two. Michael Jordan wanted to sign with Adidas as his shoe sponsor. In fact, publicly called himself an Adidas nut. Fact number two, fact number three, Sylvester Stallone, so we're going through all the big names here. Sylvester Stallone wore Adidas tracksuits in the Rocky movies, which was formal product placement that made that actor millions of dollars.

• 6:28Speaker 01

  Hard to choose. That's hard to choose.

• 6:31Speaker 00

  What are you going with?

• 6:32Speaker 01

  Two truths and a lie. Well, I might have an inkling on one of them. I have done a lot of work in the soccer, football space. So I know one of them. I did see that movie, Air, which was about Michael Jordan going to Nike. So I guess I'm gonna say that's the lie, because he ended up at Nike.

• 6:49Speaker 00

  Okay, okay. No, I like it. I like where you've gone there. I think there's logic there. If this was Who Wants to be a Millionaire, you've worked through the answers.

• 6:57Speaker 01

  Yeah, can I find a friend?

• 6:58Speaker 00

  I think you can.

• 7:00Speaker 01

  I'll be back, I'll be back.

• 7:01Speaker 00

  Perfect. All right. No, that's good. So two truths and a lie, we'll tell you at the end. But here's the story, right? This is why we're talking about this brotherly feud. It's because it helps explain why shoe brands are everywhere around sports and why sports marketing in general is so enormous now. These brothers were the first to figure it out, but they did it in complete competition with each other. They hated each other and they fought over this new gold mine that they had discovered together until the day they died and were buried at opposite ends of the same cemetery. What we're left with now is really their legacy. Thanks to Adidas and Puma, we now associate certain brands

• 7:46Speaker 00

  with winners. I mean, we know this stuff. David Beckham's boots, they were Adidas. Usain Bolt, he set the 100 meters world record in Puma's very publicly. In almost all of the famous photos of Muhammad Ali, he's wearing Adidas. I mean, this stuff is very visible to us. And whether we're aware of it or not, whether we want to admit it or not, these associations build a brand identity that we really do notice. The strategy that these guys cooked up was just be visible as often as possible. It doesn't matter which team, just be seen. And this is all a pretty full on story. It's filled with venom. And

• 8:31Speaker 00

  it's really not talked about much because it doesn't benefit Adidas and Puma at all to talk about how they were started by feuding Nazi brothers who never forgave each other for stuff that we kind of can't even really understand. So let's talk about it. Well, let's start at the start.

• 8:48Speaker 00

  So this story starts right after World War One in Germany. So it's kind of hard to imagine a more chaotic time and place. The monarchy has just been replaced by the Weimar Republic. Country is completely crippled by massive war debts. And the Treaty of Versailles held that Germany would take full responsibility for World War One and pay reparations and reduce its military to just 100,000 men. So what that meant was unemployment skyrocketed, hyperinflation took over. Basically, nobody had a job or very few people did. And if they managed to get one, they'd still be screwed because the money they were earning wasn't really worth anything.

• 9:28Speaker 00

  Like a loaf of bread cost about 200 billion Deutschmarks in 1923. That's a few Deutschmarks.

• 9:37Speaker 01

  That's a lot. That's a lot of Deutschies.

• 9:39Speaker 00

  I mean, what do you do? These are the, these were those pictures you see of people like, you know, burning their cash because it's cheaper than firewood or like giving kids the cash to play with because it's literally worth bugger all.

• 9:51Speaker 01

  Yeah. Here's a 10 million Deutschmark note. Go buy yourself a loaf of bread.

• 9:55Speaker 00

  Yeah. I mean, you see this sort of stuff occasionally throughout history in like Zimbabwe and places like that, but 200 billion Deutschmarks for a loaf of bread. I mean, that is, that is a crazy situation. It's a crazy time and place to be starting a business.

• 10:07Speaker 01

  Yeah.

• 10:07Speaker 00

  But that's what it was like. So here we are in south central Germany, town called Herzegenerack. Took me a couple of goes to get that right.

• 10:14Speaker 01

  I think you landed on that pretty well.

• 10:16Speaker 00

  I'm nailing it now.

• 10:17Speaker 01

  Yeah.

• 10:17Speaker 00

  You come at me anytime. I'll give you.

• 10:19Speaker 01

  I'm ready.

• 10:20Speaker 00

  Herzegenerack. So Adolf Dassler, he's the youngest of four kids. He and his older brothers, Rudolf and Fritz, have just come back from the war in one piece. His sister Marie and their parents, they all still live in this hometown and they're just kind of trying to get by. Christoph is the dad. He's a shoemaker in a factory. And Pauline, the mum, has a semi-commercial laundry. So as I said, it's a big deal to kind of have a job at this point. And they're working pretty hard. Kristoff taught his kids about shoe making, but he couldn't hire them in the factory because he was just a worker. He wasn't in charge. But the kids, they started making shoes anyway. And Adolf was the best at this for sure. He really loved it.

• 11:03Speaker 00

  He would roam around the fields near the town scavenging for war debris, anything really that could be useful. He'd cut strips of leather off old helmets. Obviously finding a boot was a huge win, but he'd cut up parachutes, food ration pouches, bring it all back home so he could try to turn them into shoes or slippers to sell. Now Rudolf was helping him, but Fritz, the oldest brother, he decided to start a Lederhosen factory called Kraxler.

• 11:35Speaker 00

  Unfortunately for him, Rob, leather pants just didn't end up taking off.

• 11:39Speaker 01

  Oh, really?

• 11:40Speaker 00

  The same way that-

• 11:41Speaker 01

  I mean, I've got mine on right now. Yeah.

• 11:44Speaker 00

  This is the problem, right? So there's three brothers. There's obviously descendants from all three brothers. Two of them, as we know, go into the sports shoe business. One of them goes into Lederhosen leather pants.

• 11:54Speaker 01

  Yeah.

• 11:54Speaker 00

  And we never really hear much about Fritz or the family after that.

• 11:58Speaker 01

  No, I like to imagine that on Christmas and Easter and other family occasions, that there's one side of the family all in Lederhosen and the other side of the family is all in Adidas and Traxxas.

• 12:09Speaker 00

  I know, I know. That's the thing. I mean, it really fizzled out fast. Like, I was really struggling to find much on Fritz and the Kraxler Lederhosen business.

• 12:17Speaker 01

  Yeah.

• 12:18Speaker 00

  After he died in the early seventies, it just went away.

• 12:20Speaker 01

  That's it. There's about one month of the year around Oktoberfest where I'm sure they do really well.

• 12:24Speaker 00

  You've got to make hay while the sun shines.

• 12:26Speaker 01

  And that's probably about it.

• 12:27Speaker 00

  Yeah, so they backed, Fritz backed the wrong horse for sure. Unfortunately. But the other two, they were right into it. They were making shoes and they were really kind of making a go of it. Despite the economy being in the absolute toilet, in 1923, they formed Geburtha Dassler Shoe Fabrik, which is basically just Dassler Brothers Shoe Factory. And while Addy and Rudy, as they were known, might have been brothers, they were very different people. And that actually probably helped them in those early days when they were working together. Because Addy was a quiet, classic, methodical guy. Experimental, he was always tinkering with the shoes. He was really into the product, adding a bit of leather here.

• 13:10Speaker 00

  He was trying out spikes really early in shoes. Very obsessed with weight. He was trying out other stuff too, weird stuff early days like shark skin and kangaroo hide. Rob, bit of an early inclusion, early kangaroo hide. I can't imagine there's many kangaroos getting around Germany in this point in time. How's he getting hold of them? It would cost a lot. Wouldn't have thought there'd be many getting around in central Germany, but for those early few years, apparently he was experimenting with them. Good on him. Shark skin. Good on him. Very weird, good on him. Yeah. Certainly. So that was Adolf. Rudy, much more of a salesman. He was kind of the ambitious one. He was assertive, strategic.

• 13:51Speaker 00

  And I mean, really, when you think about it, that is a classic business combination, product person, strategy person. And for a while, it worked really well. They started small, making shoes themselves out of their mum's laundry. And they were making both normal shoes and sports shoes, important to say, but they were really only interested in sports. And they were coming along at the exact right time. Modern sport, very much still forming in the 1920s. And a lot of the huge global sports that we watch now had really only been invented for a couple of decades. Professional sports, professional sports, doesn't really exist yet, or if it does, it's very, very basic in terms of how the money flows.

• 14:35Speaker 00

  That said, athletes, they were starting to take the performances pretty seriously. But the shoes they had at the time, before the Dasslers came along, they were terrible. I mean, Rob, we might even be able to have a bit of a look here at some of the 1920s sports shoes. You'd see them and you'd think they were more at home and like a, you know, construction site, to be honest, a massive. It would be very hard to curl one into the corner, wearing those, I imagine. It would. Yeah. I mean, I think you'd want shin guards, wouldn't you? You'd hope so. I mean, honestly, you'd stay kicked. Were they invented then? I hope so, because if one of those hit you in the shins, like you'd be game over for you. Yeah, absolutely. No need to roll around on the ground like to pretend.

• 15:19Speaker 00

  Yeah. Oh, there's a gaping hole in your leg. Oh, okay. Bad outcome. So this is what people were dealing with back then in the 1920s. And, um, you know, obviously there was room for improvement. So that's what the Dasslers were really good at. They were making lightweight. Running shoes with special leather strips on the side that sort of made them strong without sacrificing the weight. And they decided that they could do this for sports on field as well as just running. That's basically the crux of their early local success. Now Adolf also added spikes to track shoes and studs to the football boots, which is a big deal and athletes loved it. So they were kind of often racing pretty quickly.

• 15:58Speaker 00

  And then came the really big break. That's the 1936 Berlin Olympics, which is Hitler's Olympics, of course. And it's the product guy, Addy, he comes up with the big idea here. Basically, he says to his brother, if we get the best athletes to wear our shoes, then everybody else is going to want them too. And they decided that they needed to make their shoes distinctive so they could be seen. So on the side, they had two strips of white leather that people could see from the sidelines, which was kind of the first in a very long list of revolutions from these two. Clear brand identifiers on the shoes that could be easily seen from the sidelines,

• 16:39Speaker 00

  which I guess is kind of the seed of how sports marketing works. I mean, none of it actually works without being able to identify who's got what on their feet. And they wanted everyone wearing their shoes. So they build relationships with the coaches and the athletes. And when you think about it, people really only remember that particular Olympics for one star athlete, and it was Jesse Owens. He was American, he was black, it's definitely not part of the plan for Hitler. But he won four gold medals in Berlin and he was wearing Dassler Brothers shoes the whole time. And the way this happened was surprisingly straightforward. Adolf Dassler,

• 17:20Speaker 00

  he walks into the Olympic village, he knocks on Jesse Owens' door. Owens opens himself because he was just sort of there. This isn't like when you have to go through five layers of security and management to get to an athlete. They were just sort of there. Addy showed him the shoes, talked to him about how great they are and about the spikes and all these sort of innovations that he'd been doing to make them strong and light. By the end of the conversation, Owen says, quote, "I'll wear those or nothing." So he absolutely sold him on it. So kind of as much as Adolf is meant to be the product guy, he clearly knew his way around a sales pitch too.

• 17:54Speaker 00

  It's actually interesting to me that Adidas never really talks about this. I mean Adolf took a big risk by working with a black American athlete during Hitler's Olympics in 1936. It kind of creates a tension inside the brand, really, that actually reflects kind of well on them today, given that this was definitely during the Nazi regime. So they've got the endorsement now of Jesse Owens, the biggest athlete in the world. That is huge, obviously. It means that they're immediately taken seriously by everyone. Their success is going from being local to now being much bigger than that. And the guys are hooked on that. They want more. So the pair decide that they want basically as many athletes as wearing their shoes as

• 18:39Speaker 00

  possible. And so they start supplying them to athletes for free, more broadly than just the best ones. And this is a turning point, I think. They wanted the people in the stands to see the shoes on the feet of the stars, but they were setting themselves up really for a future when everyone in the world would see their shoes, because all of this is happening well before TV. But now we kind of get to the darkest part of this story. The part these brands absolutely never talk about. It was Hitler's Olympics because he became chancellor in 1933, turning Germany into a Nazi dictatorship. And the Dasslers joined the Nazi party early and enthusiastically, within three months, according to the book

• 19:23Speaker 00

  Sneaker Wars by Barbara Smits, which is a great resource for this story and one I'm using liberally here. And this is about the time the relationship between the brothers starts to fall apart. They both get married and everyone is working together in the factory and living together in a big house in Herzegenerach. So it's close quarters. I mean, Rob. A lot of people have got siblings. Can you imagine like you're working with them all day? And you and your partner and increasingly kids are living in one big house. It's kind of a melting pot. It's a powder keg, isn't it?

• 19:59Speaker 01

  It would be very difficult. Like I always think about couples who work together and live together. Like you don't really get much of your own time.

• 20:06Speaker 00

  Yeah.

• 20:07Speaker 01

  I couldn't do it.

• 20:08Speaker 00

  It's, it's, it's pretty hard. I mean, I think any like share housing is tough.

• 20:12Speaker 01

  Yeah.

• 20:13Speaker 00

  Add in, you know, siblings.

• 20:15Speaker 01

  Yeah.

• 20:15Speaker 00

  Probably really tough.

• 20:16Speaker 01

  Oh yeah. You didn't do the dishes. Yeah. Well, you didn't file the receipts. What are you doing?

• 20:20Speaker 00

  That's right. Exactly.

• 20:21Speaker 01

  Yeah.

• 20:21Speaker 00

  You were supposed to come up with the new, you know, the new shoe design for the footy team.

• 20:26Speaker 01

  Yeah. And you're meant to do the vacuuming. Come on, sort it out.

• 20:29Speaker 00

  That was never going to work out well. Addy, I mean, he's a pretty quiet guy by all accounts, but his wife Cathy was not. And she and Rudolph apparently clashed quite aggressively. Um, not physically, but Rudy later blamed her point blank for his feud with Adolf, which is kind of a pretty big call. And as I said, the family's growing. Adolf and Cathy, they have four daughters and a son. Whose name is Horst. Uh, he would actually later take over Adidas. Rudolph and his wife Friedel, they have two sons, Armin and Gerd, and they both end up well and truly inside Puma. Armin ends up in charge. So family relations weren't particularly good. And then the second world war started and those relations became outright bad. I don't know what it's like living through two world wars, but I would say it's pretty stressful.

• 21:15Speaker 00

  And I'd say the resentment is pretty easily grown. One thing I think that's worth mentioning is because Rudolph was older, he saw more active military time than Adolf during World War One. So he and Fritz were in the trenches for a pretty long time. But Adolf was 17 when he joined and was only in there for a couple of months before World War One ended. So. I don't know, maybe Rudolph felt like Adolf really didn't know how bad all this was. But I mean, I'm speculating on that, but I think it's worth keeping in mind. So 1939, World War Two fully underway, and that had economy-wide implications.

• 21:57Speaker 00

  Factories that didn't have to start making things that directly contributed to the war effort, they were stripped right back. They really weren't important anymore. And I mentioned the Maggi Noodles Company before. They survived because two thirds of their output now went directly to the army. But I mean, they only got that contract by guaranteeing that everyone in the business was, quote, "of Aryan descent." So I mean, this stuff was happening all over Europe. The Dasslers Shoe Factory was in a similar boat. It was making some sports shoes, but it was now also manufacturing German army gear and boots. Some say it was also making anti-tank rocket launches.

• 22:38Speaker 00

  But I don't know how transferable, like you can't use the same equipment for that, Rob, I wouldn't have thought.

• 22:43Speaker 01

  No, I don't feel like those kind of marry up. I mean, people do say you've launched a rocket when you'd have a big kick in in football, but.

• 22:52Speaker 00

  Yeah, yeah. But I mean, can you imagine you're going about making sports shoes, the phone rings one day and it's, it's your mates upstairs and they say, hey, look, can you do us some anti-tank rocket launches? And you go, oh mate.

• 23:04Speaker 01

  Rigs of marketing coming down to production and being like, hey, guys, I know we make boots, but anti-tank missiles?

• 23:11Speaker 00

  There's no wrong answers. Can we get this done?

• 23:13Speaker 01

  Have you solved this? Oh, well, we don't, we don't know how to do this. Yeah, well, you figure it out then. Okay.

• 23:18Speaker 00

  It's a bit of that, I think. And it's going through the entire economy. So they were apparently making all kinds of stuff for the war, including perhaps rocket launches. And that kept going throughout the war. And there are some sources referring to the factory using forced labour as well, which is an important detail and one not to overlook at all. Eventually, both brothers were called into active military service. Adolf was drafted in 1940 and he started training as a radio technician in Zürndorf. But he was sent back to the factory just six months later because the Nazis deemed his skills as essential to the factory.

• 23:58Speaker 00

  Which, as mentioned, was still making the boots for the soldiers and a few other things. So back he went, which suited him just fine. Then a couple of years later, it was Rudolf's turn, 1943. He was drafted into service and became an intelligence officer. And while he was gone, the factory was converted into full military and weapons manufacturing. So Rudolf stayed in the army until the end of the war. And he was eventually actually detained and investigated by the Allies for over a year. So again, in Rudolf's eyes, he was the one spending more time in another war than his brother. Adolf was getting off light in his eyes. And I think

• 24:43Speaker 00

  there's an element of truth to that. I mean, Adolf got to go home and back to work in just six months, but Rudolf had to serve for two years and then be a prisoner for another year. They were supposed to be equal partners here. I mean, they'd been in business together for about 20 years at this point. There were rumours that Rudolf believed that Adolf had been telling the Nazis to keep him away from the factory, but it's not really confirmed. And the brothers' relationship basically decays at this point into paranoia and resentment. If I'm thinking about it, the most unsatisfying part of this story is that there doesn't seem to be any big theatrical blow up, you know, where they're throwing shoes at each other and yelling in

• 25:25Speaker 00

  German about how Rudolf was the older brother and Adolf looked up to him and, you know, because Rudolf was a keener Nazi than Adolf, it was all his fault. They never really did any of that by all accounts. It was just a relatively quiet, seething separation that was never patched up. I mean, these brothers, they never spoke again. The business splits in 1946. And once that happened, it was full-blown sports shoe warfare. Stick around because we'll take a very short break.

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• 27:31Speaker 00

  So a new dawn broke. It's kind of pretty simple, really. Two brothers, two businesses, and they needed names for their new businesses. Adolf, of course, went with Adidas, which, as discussed, is a portmanteau. Good word, by the way. Great word. Adidas works. And while he was at it, he decided that he would give his shoes three white stripes of leather down the side. Remember the Dazzlers together, two white stripes. So he decided he wanted to stick with that, but go with three stripes because, you know, it was working, it was visible, something you could see from the stands. Now meanwhile, Rudolph, he toyed with the same name structure for a few months. Ruder, which would be Rudolph Dazzler, the same thing.

• 28:15Speaker 00

  But, you know, it was kind of spoiled because his brother had already pinched that style of name. So he decided to go with Puma instead, which, you know, I've looked into this, it just seems like he thought it sounded better and it was a good word, not the same structure. But you know, there you go.

• 28:28Speaker 01

  It doesn't work as well. I mean, for me, it'd be Robford and I guess you'd be Chola or.

• 28:35Speaker 00

  Chola Shoes.

• 28:35Speaker 01

  Chola Shoes.

• 28:36Speaker 00

  Too bad.

• 28:37Speaker 01

  That's not too bad.

• 28:38Speaker 00

  Are we doing shoes now?

• 28:39Speaker 01

  I guess so.

• 28:39Speaker 00

  I think we've got the names. I mean, we're in.

• 28:42Speaker 01

  We're starting.

• 28:42Speaker 00

  According to this, this is all you need. It's a really good name where you squish your first and your surname together. I mean, so he meanwhile, and I should say he's over the other side of the river now. They've split completely. He also wanted to have some white leather down the side of his shoes, but he wanted to use a chunkier band, which he called the Form Stripe. So again, something you could see from the stands. The brothers let factory workers decide which way they wanted to go. And pretty soon the entire town had picked a side. And that's the way it stayed because the factories were the biggest employers in the town. Hertz Generec was basically now all about these two companies, Additass and Puma.

• 29:24Speaker 00

  The families of the people working in the Additass factory, I mean, they used different bakeries, different barbers, different bars than the families of the Puma workers. In fact, it became known as the town of bent necks. Because people would always look down and see what kind of shoes were being worn before they started talking to them. Which, I mean, that's pretty full on.

• 29:47Speaker 01

  It's so bizarre. Do you think that the bakeries who served the Additass employees only made tiger bread that had stripes on it?

• 29:52Speaker 00

  Maybe. I mean, you'd be bummed if one bakery was much better than the other one. Be like, sorry, I can't go there. Or the barbers, like if one, if half of the town just had terrible haircuts. They can't, like, I'm sorry, you're not welcome here. I don't know. I mean.

• 30:06Speaker 01

  I can't go there, sorry.

• 30:07Speaker 00

  Seems quite, quite a lot. Like, you know, we live in a place where, where Aussie rules is very, very big. There's none of that at all. Like, yeah, the idea that you split, you know, certain things into certain people, places, I don't know.

• 30:21Speaker 01

  It's not very German to put a wall through a city though, is it?

• 30:28Speaker 00

  It's a very good point. So maybe this is the style. Like, you know, I don't like you. We're just never going to have anything to do with each other ever again. Okay, now we're getting somewhere. But so apparently Hertz and Generac is actually still pretty divided down that line. Not as much, obviously, but it's still a thing. So just like that, two businesses were made out of the ashes of the old one. And they were instantly locked in a very bitter rivalry. And from the outset, it really wanted people to pick between them. You're either on our team or you're on theirs. So here's where this story basically stops becoming a matter of, oh, wow, what an awkward family Christmas. Because Adidas and Puma didn't just compete like normal companies.

• 31:11Speaker 00

  They competed like people who wanted the other person to suffer. Kind of vitriol that you can really only get in a family business fallout.

• 31:23Speaker 00

  A normal company might think, how do we grow sustainably? The Dasslers, they're thinking, how do we crush this one rival who I've known since I was born, even if it hurts me? And the lesson it taught is that spite is an underrated economic force. It doesn't always create profits, but it certainly creates motion. So what happens next?

• 31:48Speaker 00

  Well, the rivalry between Adidas and Puma drove two major revolutions. Number one, athletes are now acquisition targets with a market, two bidders. They figured this out together at the Berlin Olympics with Jesse Owens. And now it's absolutely open season. They are scrambling to get their boots on the feet of the best athletes in the world. The two big events for them were the Football World Cup and the Olympics. The 1950 Brazil World Cup, that was a non-starter for the brothers. Germans weren't allowed in. I mean, the war was still pretty fresh after all. But in 1954, They were back.

• 32:29Speaker 00

  All of a sudden, these two German shoe companies are aggressively trying to get players and whole teams to wear their shoes. And Adidas snags the first big one. They get the entire German team by inventing adjustable studs on the bottom of the boots. So that meant that if the weather changed, the players could quickly change the studs. And the weather did change and Germany won that World Cup. Which is obviously a massive moment for reputation building. I mean, the coach of the German team, Sepp Herberger, he loved Adidas. He loved Addy. He was talking openly about how great these boots were and how they helped them win the World Cup. I mean, there's pictures of him standing with Addy, wearing Adidas shoes.

• 33:13Speaker 00

  I mean, this, people are watching, paying attention now. So big score won for Adidas for sure. The next big moment, 1956, that's the Olympics in Melbourne. This was another big score for Adidas and pretty much an unmitigated failure for Puma. But it's this time that Addy and Rudolf's sons are on the ground doing the hustling. Horst was Adolf's son and Armin was his cousin over at Puma, Rudolf's son. These two, like their dads, are not at all friendly or on speaking terms with each other. And Melbourne was important because it changed the way people saw the two companies.

• 33:56Speaker 00

  I mean, Adidas was kind of meant to be the product-focused nerds, while Puma was meant to be the extroverted salesman. But it was Horst from Adidas who had, yet again, the big, bright idea of giving shoes for free to massive numbers of athletes, not just trying to pick a handful that were going to win the gold medals. He just was trying to give away as many Adidas shoes as possible, which is a costly and gutsy thing to do. And it worked because this was right when global media became a thing. The 56 Games were actually when television first came to Australia.

• 34:38Speaker 00

  So pictures from these Melbourne Olympics were being relayed, I mean, all over the world. And you can see right there, you can see the Adidas shoes on the feet. I mean, Rob, that's a big deal.

• 34:51Speaker 01

  That's a massive deal. And I think for a lot of people who may not have known what the brand Adidas was, you'd have seen the three stripes on the shoes, you would have recognised them. And then down the line, you walk past a store and you're like, oh, hey, I recognise that.

• 35:03Speaker 00

  That's the thing. I mean, they were figuring this out really, this is the start of the whole lot. And as I said, because Adidas was the one pumping free shoes to all these athletes who are still not really being paid, or if they are being paid in any way, it's nothing meaningful. So they're loving getting these expertly made German shoes on their feet. And so increasingly, like the first three, the first five people across the finish line, they're all wearing the same shoes. I mean, that is brand domination that we kind of can't even really imagine now. And happening at the Olympics, I mean, it's huge.

• 35:33Speaker 01

  Yeah, exactly. There's so much more competition now.

• 35:35Speaker 00

  Just for the cost of the stock. I mean, they weren't having to pay for that. So that's a big deal. I mean, this is where the brands are kind of starting to be cemented. And Puma has nowhere near as much success at the Melbourne Olympics. So they're officially now on the back foot. Now, the second big thing that this feud is doing is creating product innovations that are accelerating far beyond what they probably otherwise would have. So far, I mean, this rivalry has been about the quality of the product, convincing athletes that the shoes were the right ones to help them win. Brands weren't really paying athletes yet, so the battle was about the quality of the product.

• 36:19Speaker 00

  And that meant that innovation was the language that they needed to speak. So that meant a lot of stuff happened quite quickly. Studs became highly customisable. Same with spikes, the materials became lighter and breathable. As I said, we're now talking about kangaroos and shark skins and stuff like that. Laces are getting tucked away. You remember that? That was still a thing when we were kids.

• 36:40Speaker 01

  Yeah, big time.

• 36:40Speaker 00

  Tucking the laces away, that was massive. This is all when it kind of started, it was to impress the athletes. That, that all suited Adidas totally fine because their whole identity had been about product obsession and tinkering in the factory. Puma's just kind of trying to keep up.

• 36:58Speaker 00

  These changes probably would have happened anyway, but I mean, this is like an arms race at this point. Competition between these two brands sped it all up. But Rudolph and his side of the family were the big thinkers and the salespeople. And by the 1960s, they were taking the battle to new and different places. Sport was now exploding. There's more TV broadcasts, more global tournaments and more celebrity athletes. And Puma was focused on that last one, celebrity athletes. This is where Puma pulls off kind of one of the greatest marketing stunts in sports history. Certainly one of the first of its kind.

• 37:41Speaker 00

  It's the Pelé moment because in the 1970 World Cup, Puma signed Pelé, the greatest football player in the world, hands down. I mean, Rob, you know a lot more about soccer than I do. Sorry, soccer, football. He's one of the best in history. Is that fair to say?

• 37:57Speaker 01

  Yeah, absolutely. And particularly in this era, he is the only player who's ever won three World Cups. And the World Cup is the biggest event in the sport. It's when casual fans often get interested in it and he's only got to win it three times.

• 38:11Speaker 00

  Three times. It's only every four years. So, I mean, if you were doing a kind of a modern comparison, what would you say? Is this like a Tom Brady type of guy? Is it like a?

• 38:20Speaker 01

  Yeah, I mean, it's Messi and Cristiano Ronaldo if we're sticking to the same sport. But again, those two haven't won three World Cups. It does help to have the team to support you, but yeah, Pelé was just as big in that era.

• 38:34Speaker 00

  Unquestionably one of the first big celebrity athletes, global names, I guess.

• 38:38Speaker 01

  Yeah, I mean, he was a big enough name that the Americans wanted him. He went and played in New York because he just brought in so much money for them.

• 38:47Speaker 00

  Well, it was certainly becoming about money for these two brands. I mean, I think this is a really important one, Pelé, because according to the legend, there was one lingering agreement between Adidas and Puma, which is that neither would sign Pelé because they knew that it would cause a bidding war, you know, hands off. Basically, they kind of, you know, they didn't say it to each other because they weren't on speaking terms, but maybe people were relaying the information back and forth that we kind of don't really need that kind of problem. Which sucks for Pele, but in 1970, it became fine for him because Rudolph's son, Armin, broke the peace deal. And fair play, because he kind of needed to do something. As I said, he was on the back foot and he did something. The Brazilian superstar, he was given 125,000 US dollars for a four-year deal, including

• 39:32Speaker 00

  the Mexico World Cup. And he also got 10% of the sale price on Puma boots that carried his name, which is a breakthrough, really. This is, this is a huge kind of deal that hasn't really been done before, the money and the structure of it. And Puma absolutely milked their moment. At the quarterfinal, where Brazil was playing Peru, Pele asks the referee to stop the game so he can tie his shoelaces. And the camera zooms in on his boots. This is not an accident. Puma reportedly baked this into the brand deal. I mean, that is engineered television marketing at its best. The first one was an absolute success. Real viral marketing stuff, Rob.

• 40:17Speaker 00

  I mean, everyone's watching the World Cup. They still watch it now, but I mean, in 1970, obviously, TV's new, everyone's crowding around the screens, right? To see the camera zoom in on the form stripe, that would have been massive.

• 40:30Speaker 01

  Yeah, and it's unexpected. Like, you're just sitting there, you're watching the football, or like right now, you're watching a podcast and then suddenly there's a plug of someone drinking some water, you know?

• 40:42Speaker 00

  And it kind of seems like it may not be marketing. I mean, it's kind of, it's subtle enough to maybe get by our initial radar, but all of a sudden, what, a billion people might be watching this thing?

• 40:53Speaker 01

  Yeah, easily.

• 40:54Speaker 00

  Far out. So Pele, he went on to win the World Cup for Brazil. He was, of course, wearing the Puma shoes on his feet very publicly. So finally, the key to the Puma side of things had now been unlocked. Adidas was the product-obsessed tinkerers. Puma, they're the big-picture thinkers. And now they're fighting the battle on their terms. And they were totally revolutionizing the business of sport. I mean, a lot of people think Michael Jordan invented revenue share deals when he signed with Nike, but that's not really true. It was kind of Puma and Pele. And then they did something even bigger because Puma set its sights on America.

• 41:36Speaker 00

  And signed Walt Frazier in the NBA, Joe Namath in the NFL. I mean, these are probably names that a generation prior would be very familiar with, particularly in America, Rob.

• 41:46Speaker 01

  Absolutely.

• 41:47Speaker 00

  I wasn't that familiar with Walt Frazier. I know who Joe Namath is.

• 41:49Speaker 01

  Yeah, I only know Joe Namath from The Simpsons.

• 41:51Speaker 00

  Me too.

• 41:52Speaker 01

  That's our generation.

• 41:54Speaker 00

  God, very predictable, but if you put it in The Simpsons, I'm gonna know about it. Yeah. All of a sudden, it was Adidas who was kind of playing catch up. It wasn't really about convincing athletes which shoes were kind of better anymore. It was more about who could pay them more. And this is about the time when the deals start getting huge. And that's the thing, once the price of sponsorships starts jumping, it kind of keeps jumping. I mean, fast forward to modern times, in 2023, it was reported that Manchester United signed a 10-year deal with Adidas worth about 900 million pounds, Rob.

• 42:34Speaker 01

  It's a fair bit.

• 42:35Speaker 00

  Do you know what I mean?

• 42:36Speaker 01

  It's a lot of money.

• 42:36Speaker 00

  It's also paying about 60 million pounds per year to be the kit sponsor for Liverpool. So it is spreading itself out. It's not like it's all in on one thing. Meanwhile, Puma reportedly paid crosstown rival Manchester City a billion pounds over 10 years.

• 42:52Speaker 01

  Yeah, you'd hope they make it back. Like, it's a lot.

• 42:56Speaker 00

  They're gonna have to make it back because we're still in those deals.

• 42:59Speaker 01

  Yeah, and it's globalized, like the English Premier League, along with the big American leagues, they're watched on every single continent.

• 43:06Speaker 00

  And we should make the clarification here that these are the kit sponsorships. It's not to say necessarily that it's their name that's emblazoned in the biggest letters on the jersey. It's just the little one. And they get to design, how does it work? They get to design the uniforms?

• 43:21Speaker 01

  Correct. Look, and there are some sporting clubs who are very traditional and their jersey doesn't change too much. But there are clubs, whether it be in football or basketball or any other sort of sport, where their jersey changes quite a bit. And particularly when a different brand comes in to make them. Like you as a fan might be like, oh, wow, cool Adidas are now our kit sponsor. I've seen them be making. Cool kits for another team in our different competition. And to just use football as an example, you've got a home kit, you've got an away kit. You've got a third kit for different jump to clashes that you might have. You've got a couple of goalkeeper kits as well. Not to mention all the different players and all the different numbers that you can get on the back of them. There are so many different ways that they can sell these.

• 44:05Speaker 00

  So I suppose that's where the nine hundred or a billion pounds comes in. It's trying to sell multiple versions of the same sort of outfit, really.

• 44:12Speaker 01

  Yeah.

• 44:13Speaker 00

  And they do, I mean, what, a diehard fan might have a few in the wardrobe, pulling out on different occasions?

• 44:17Speaker 01

  Yeah, absolutely.

• 44:18Speaker 00

  And like, be honest, how many Bombers jerseys do you have?

• 44:20Speaker 01

  Far too many, too many, too many, far too many. But, you know, it's a thing where every few seasons, there might be a particular player or a particular top that really grabs you. And you're just like, I just want to buy this. And particularly for those big leagues, like it's not just English people who are buying this Premier League tops. They're getting bought by people in Australia, in China, in Africa, in North America, in South America. They're being bought everywhere.

• 44:45Speaker 00

  So the money is now kind of in the stratosphere somewhere, but it had to come from somewhere. And, and what we've been talking about is where it came from. It built on it, on itself. Other brands enter, you know, Umbro and Nike and Reebok, they're all joining in this bidding war. But still, at the heart of it, you'd have to say it's, it's Adidas and Puma. So that's kind of where this thing started. The Dassler brothers, they, the original ones, they died in the seventies. But I mean, they're kind of still at it really, bidding each other into oblivion. And it was about individuals, whether they played sports or not. I mean, David Beckham, he signed what is widely described as a lifetime deal with Adidas worth an estimated,

• 45:28Speaker 00

  and these are pretty rough numbers, they sort of shift around a bit, but I've read it was a hundred and sixty million US dollars. I mean, that goes well beyond his on-field performance, which, you know, it was great. But really, he's about much more than that these days.

• 45:42Speaker 01

  He's a brand.

• 45:43Speaker 00

  He's a brand.

• 45:44Speaker 01

  Brand Beckham.

• 45:45Speaker 00

  Brand Beckham is associated with brand Adidas, always has been. So that kind of matters. And then we start to enter what I suppose you describe as the culture wars here. Cause during the second half of the 20th century, these two brands, of course, they're duking it out over athletes. But there is another battle. Developing and Adidas is kind of swooping on it directly. Thanks to this bloke called Angelo Anastasio, which is a ripper name for starters. Like, that's just a good name and you can see him there. He kind of fits it. He's the son of Italian migrants. He moved to New York in the 1960s with his parents. Apparently he was a very handy soccer player in his own right. He played for the New York Cosmos, but he was never kind of going to be a superstar.

• 46:29Speaker 01

  Do you know who played at the New York Cosmos?

• 46:31Speaker 00

  Go on, tell me.

• 46:32Speaker 01

  Pelé.

• 46:32Speaker 00

  Did he actually?

• 46:33Speaker 01

  Yeah, that's the American club that he went to.

• 46:35Speaker 00

  I mean, that's a nothing club, isn't it?

• 46:39Speaker 01

  Yeah, like they're not a big club. Like I don't think they even exist anymore.

• 46:42Speaker 00

  Well, that I haven't heard of him lately, but like somebody's just paid him an absolute bomb to go to the New York Cosmos. So maybe I'm not giving Angelo enough credit here. Maybe it's a good club.

• 46:56Speaker 01

  Yeah, I mean, look, yeah, I don't think they're in the MLS. I'm not sure if they're a professional side these days.

• 47:01Speaker 00

  Far out. The amount of money that the New York Cosmos was spending by the sounds of things, I wouldn't have got a return on it. Good on them though, you know?

• 47:09Speaker 01

  Got to be in it to win it.

• 47:11Speaker 00

  So Angelo decides he's going to move to LA and he gets a job with Adidas in a new division called Entertainment Promotion. This is obviously pretty early in the piece. Celebrity endorsements hadn't really been given a name yet, but people kind of knew what it was and it was getting important. His job was basically to find influential people to wear Adidas. And he was really, really good at it, which is why he's in this story. You know, he was this loud talking curly haired guy. He found it easy to make friends with celebrities. The most important friendship he had was with Sylvester Stallone. He told Stallone, uh, here you're making this movie Rocky. What I'm going to do for you, mate, is I'm going to give you, I probably didn't say mate.

• 47:57Speaker 01

  No.

• 47:57Speaker 00

  Let's be honest.

• 47:58Speaker 01

  No.

• 47:58Speaker 00

  That's, that's me.

• 48:00Speaker 01

  He probably said, hey.

• 48:01Speaker 00

  Probably didn't, he probably didn't say, mate, look, I've, I've gone and I've, I've stuffed that, but that's okay. This is the, the vibe of it. He said, look, mate. We'll give you as many Adidas tracksuits as you need. Boxing shoes, whatever you need for the production of this movie. Totally free, of course, and Stallone, he's loving this because the movie did not have a huge budget, relatively speaking, and product placement, I mean, it wasn't really a thing yet. He just wanted it to look legitimate. He wanted Rocky to look like a real boxer. So he didn't really know how much people would end up charging for that sort of thing. And again, he didn't know how much of a success this movie was going to be.

• 48:40Speaker 00

  Adidas ended up selling about three quarters of a million of the black fleece warm-up tracksuit worn by the Italian stallion himself. I mean, there you can see it. It is a great tracksuit. No doubt. 750,000 units sold directly on the back of the endorsement that Rocky Stallone was giving. The kicker here is that Stallone never asked for a cent from Adidas and he was never paid any money, which is incredible when you think about it. I mean, a bit of an own goal for poor Rocky, but Angelo Anastasio would have been getting high fives galore inside Adidas, kind of cements him as the guy for this.

• 49:23Speaker 00

  By all accounts, at this point, he gets himself a red Ferrari, licence plate Adidas one. I mean, why not, right? He's a casual guy. He's earned it. Low-key opera. He's absolutely, he's walking on clouds through Los Angeles. As I said, he's incredibly good at his job. He's now doing this all over the place. He cozies up to Ziggy Marley pretty soon. Bob Marley's wearing Adidas tracksuits on stage. And then in the mid 1980s, he noticed a lot of young break dancers were wearing Adidas pants and he asked them, why? And why are you wearing Adidas pants? And they said, it's because they're slippery. You know, here we are dancing on a lot of time broken down cardboard and it lets us do our moves and spin around.

• 50:07Speaker 00

  Can you tell that I don't know much about breakdancing? Do our moves?

• 50:10Speaker 01

  I would say, I would say we're two guys who have never breakdanced in their life.

• 50:15Speaker 00

  That's a fair assessment.

• 50:16Speaker 01

  Australians are breakdancing today, they don't marry up.

• 50:18Speaker 00

  They don't. I mean, it was in the Olympics, we know that.

• 50:21Speaker 01

  Yeah, let's not speak about that.

• 50:22Speaker 00

  Yeah, yeah. Australia didn't cover itself in glory there.

• 50:26Speaker 01

  No.

• 50:26Speaker 00

  Well, maybe it did, but the point is Adidas pants were favoured in the eighties and possibly still today. So when he found out about this, Anastasio's, you know, his eyes light up and he immediately does what he does best. He started giving these guys who were breakdancing as much Adidas stuff as they wanted. Three guys in particular, he was really, you know, handing out this stuff to, which was a great get because they turned out to be Run DMC. Now, fast forward a little bit, he signs Run DMC as brand ambassadors for a million dollars.

• 51:03Speaker 00

  And he later said that they generated overall about a hundred million dollars in sales over the first four years of that partnership. I mean, what an absolute follow-up to the Rocky situation. He's snagged Run DMC, million dollars, hundred million return.

• 51:20Speaker 01

  He's just gone 100X on two deals back to back.

• 51:23Speaker 00

  I mean, honestly, what kind of heater are we talking about? Who else can you think of who is on that kind of a hot streak? Unbelievable.

• 51:31Speaker 01

  Not many people.

• 51:31Speaker 00

  Not many people.

• 51:32Speaker 01

  Definitely not me.

• 51:33Speaker 00

  I mean, really, it got better because Run DMC actually had a song that was called My Adidas, which, you know, they said Adidas.

• 51:41Speaker 01

  Yeah, my Adolphs didn't go well.

• 51:44Speaker 00

  Would not have worked.

• 51:45Speaker 01

  Did go well.

• 51:46Speaker 00

  No, you can't be doing that. Unfortunately, it wouldn't have worked. So like My Adidas or My Adidas, the lyrics are, I wear my Adidas when I rock the beat. And they'd go on stage in front of tens of thousands of fans who would hold up their Adidas shoes and T-shirts, which is kind of incredible really from a branding perspective. So Anastasio has now helped make Adidas into a cultural icon by the second half of the 1980s. Not just a sports brand anymore. This is kind of the type of crossover that brands have really been trying to replicate kind of ever since. Interestingly, this is what made life really hard for Nike.

• 52:27Speaker 00

  We all know that Nike wanted to sign Michael Jordan and of course ended up being successful, to say the least. But Michael Jordan, he wanted to go with Adidas and Adidas offered him $100,000. He was ready to take it. He was even quoted as saying that he was an Adidas nut and that he didn't want to go anywhere else. Of course, the story takes over and goes in a different direction there. He signs with Nike for a large amount of money and an incredible revenue share deal, which goes down in history and he's now a billionaire, of course. So it's a good thing he did. But the identity of Adidas had taken hold in him and in everyone at this point. Meanwhile, Puma is really sticking with sports and it's paying the price.

• 53:09Speaker 00

  It's in the mix, but it's kind of nowhere near Adidas in terms of this kind of identity. In the 1980s, I mean, it did have some great basketball players on its roster like Isaiah Thomas, Ralph Sampson, which I'm now told were big deals.

• 53:26Speaker 01

  I know Isaiah Thomas, the Bad Boys, Detroit Pistons.

• 53:29Speaker 00

  Yeah, from the Pistons. I remember seeing that in the, in the Jordan documentary.

• 53:33Speaker 01

  The Bad Boys doco is also very good. I highly recommend that.

• 53:37Speaker 00

  Well, so he was wearing Puma and you know, that's, that's kind of, that's not a bad get.

• 53:41Speaker 01

  Yep.

• 53:41Speaker 00

  I mean, there was some cultural crossover, people wearing those basketball shoes as streetwear, but it was a far cry from the Run DMC and the explosion that was happening in LA for Adidas. Puma then decided to go all in on a 17-year-old tennis superstar named Boris Becker, who had just won Wimbledon twice, handing him this monster deal, Puma that is, with $5 million per year and a 10% commission on all of his shoes. He was the golden child. Everybody loved him early days, Boris Becker. I mean, again, not really our vintage, but it's very important to know how big of a deal he was winning this back-to-back thing. He's German, they love that.

• 54:23Speaker 00

  So at the same time, Puma are spending all this big money on this new South American superstar called Diego Maradona, another name that people are familiar with.

• 54:32Speaker 01

  Big name.

• 54:34Speaker 00

  So they went big in Brazil with Pele, they've now gone big in Argentina with Diego Maradona. And, you know, credit where it's due, this is, this is working out quite well. So while Adidas is big in North America, Puma is now very, very big in South America. But Puma, at this point, decided that it was decision time, they had to do something. And under Armin Dassler, they made a big decision in 1986. On July 25, the company was listed on the Frankfurt Stock Exchange. This meant more money from investors, but it also meant investors, people who had a stake in the business and in a way, a bit of a say in how it should be done. It wasn't really a family business anymore.

• 55:17Speaker 00

  Ultimately, the US market was seen as important and it wasn't doing well for Puma. The share price had risen sharply in 1986, but it became clear that Puma would finish the year at a loss. And so the share price came straight back down like a stone. At the same time, that golden boy Boris Becker was starting to be seen as a bit of a turd in the sporting world. I think it's, I, look, I think it's fair to say that. He was pissing off Germans because he moved to Monte Carlo to duck taxes and the obligatory military service that they had to participate in. And his shoes kind of just stopped selling. I mean, this is the problem with going all in on an athlete. It can go really well, but it can also not, I think.

• 55:59Speaker 01

  Definitely, yeah.

• 56:00Speaker 00

  And if, if someone who is seen as a kind of a champion of the country does something like ducks taxes or ducks the military service, I mean, you can't really do anything about that as the brand.

• 56:12Speaker 01

  No, and it's probably also a time when sports science definitely wasn't as good as today. So your guy could do his knee and then he might just be an average player or might never play again.

• 56:24Speaker 00

  Certainly, when you're paying five million bucks a year and you've gone all in on this being the kind of the person of your future, remember, he was very young, he was a teenager when he started doing so well. So all this is happening at the same time. The share price is down. Their big superstar is not really doing what he's supposed to be doing. The shareholders, they're now selling. And those that had a big stake in the company, they're getting fed up. Got to the point where Armin Dasler actually had to pay the company's dividends out of his own pocket in 1986, which is pretty much unthinkable, really. And in 1987, Deutsche Bank acted to remove Armin from his own company. The quote here is, "You have lost your business", which is an extremely German way to handle it, isn't it?

• 57:09Speaker 00

  Straight to the point. To the point. I mean, brutal. Look, Armin is devastated and humiliated. He's been in this business his entire life. And I think this is, what happened next is a little bit of an insight into this enduring feud with the other side of the family over at Adidas. I mean, Horst, Adolf's son, he publicly made fun of Armin at this point, joking that anyone who wanted to buy Puma would need, quote, "high tax deductible losses", which is a terrible joke. But, I mean, it's kind of not even a joke. But he was saying it in front of reporters while smiling, which is mean, I think. While your cousin is being dumped from his own business, shareholders are cracking.

• 57:52Speaker 00

  And it's, it's not, I mean, it's, why would you do that? I guess. He's probably just a bit of a dick. Just being a dick. I mean, interestingly, it was one of the last things that Horst did publicly, because he died in 1987. So, you know, he went down swinging right to the very end. When you think about it, it's all a bit sad. I mean, Horst and Armin, they inherited this feud. It was already up and running before they could walk or talk. But they really ran with it, right up until their last days. Armin actually only lived another three years after he was pushed out of Puma. He died in 1990 at the age of 61. So after that, the personal sting was kind of out of it.

• 58:34Speaker 00

  The family dimension at least, had now left the Adidas versus Puma story. But the commercial war, I mean, that just kept going. More people in the business and broader sector started running with the original ideas that were basically born in Adidas and Puma. And they were taking them now to new places. One that stands out is kit sponsorship. Now, we've already talked about this, but in the 90s, that's when it really, really hit its stride. The English Premier League started putting brand names in huge letters on their chest, Rob. Like, we're talking, I think,

• 59:12Speaker 00

  there you go. Arsenal had JVC, West Ham had Doc Martens, Chelsea had Coors Beer, which is interesting because that's an American beer company, isn't it?

• 59:23Speaker 01

  Yep.

• 59:24Speaker 00

  I mean, this is massive sponsor visibility in huge, huge letters. But smaller and on the chest, that was where the kit sponsorship was really taking hold. That at Adidas, Puma, Nike, Reebok, Umbro. I mean, this is a big part of that future. And this is when it started kind of going global. The NRL was doing it too, I mean, much smaller fry, but they were doing it. I mean, they had the big sponsor in the middle of the chest and the smaller sponsor up on the corner. I mean, you and I grew up watching AFL. I don't know about you, I was very aware when the kind of the kit sponsorship landed right there above the chest, below the neck on the bombers.

• 1:00:03Speaker 01

  Well, the big one for us in our generation was the TAC, which for our overseas listeners and viewers was the Traffic Accident Commission. So they were advertising not to speed or to drink and drive. But for Essendon on their jersey, they had in big letters, "Speed Kills." And look, I don't think it's ever gotten better than that.

• 1:00:22Speaker 00

  No, that was badass. No, well, I mean, that's a whole different chat. The point is that the kind of, it was about two things now. It was about the, the main sponsor, but also the kit sponsor, which was always visible. And it kind of became extremely obvious when you're watching the teams closely, who's associated with which team. So this is now beyond Armin and Horst. This is kind of where that family feud is going. As I mentioned at the start, David Beckham, he was an Adidas guy, but this is now spreading all through different sports, such in Tandilka, James Harden, you know, legendary music icons, they stuck with Adidas, people like Missy, Elliot, Pharrell Williams. So this is really spreading its tentacles now. Puma, it's got Usain Bolt, Virat Kohli, Lewis Hamilton.

• 1:01:09Speaker 00

  And every time it was those brands still bidding for those stars. Now they're mixed in with others, Converse, Under Armour. It'll probably never end. Just more players entering the space and marketing in new and inventive ways. Really, a lot of this story comes down to timing. The 20th century was where sports flourished and sports culture kind of bled into everything else. I mean, these two brands were using new weapons against each other. Everyone else was watching and learning and then acting later. If you think about it, they really did invent all this because what did sports marketing look like before the Dassler brothers?

• 1:01:55Speaker 00

  You know, mostly amateurish, local shoes and kit, extremely basic. Brands were doing one thing at a time, sort of no ecosystem to speak of. What did it look like after them? Branding becomes visible in every single sports photo and broadcast. Athletes become ad space. First, it's we'll give you our shoes for free. Then it's we'll pay you to wear our shoes. Then it's we'll pay you to wear our shoes and never their shoes. Then it's we'll build campaigns around you. Then it's we'll sponsor the entire tournament that you're actually playing in.

• 1:02:39Speaker 00

  And eventually it's we'll do a joint venture with the biggest rapper in the world. We'll call the shoes Yeezys and then we'll have to face the fallout of that rapper saying anti Semitic things. When we were originally a Nazi brand anyway. Yeezy Ados. Yeezy Ados, talk about full circle. There you go, we're back. I mean, what, what a crazy destination really, when you think about the starting point under Hitler and the, and really the endpoint where they're, they're sort of separating themselves from somebody who's saying anti Semitic things, which, you know, as they should have done. But God, think about the kind of the history involved in that. Do you know what I mean about this being a weird story? But they ended up totally embedded in culture as much as they were in sport.

• 1:03:22Speaker 00

  Doesn't really make a lot of sense until you start thinking of the whole idea of marketing as being about winners and success rather than any particular sport or team or idea in particular.

• 1:03:35Speaker 00

  And here's the thing, the Dasslers probably didn't set out to invent sports marketing. I mean, they weren't sitting in a boardroom going, you know, gentlemen, let us create brand identity. You liking this? Brand identity?

• 1:03:52Speaker 01

  Apologies to the, the nation of Germany and maybe Austria as well, and anyone else who speaks German.

• 1:04:00Speaker 00

  I thought I went in confident. I should just not do that.

• 1:04:03Speaker 01

  Yeah.

• 1:04:04Speaker 00

  They weren't really trying, they weren't trying to beat each other. Sorry.

• 1:04:09Speaker 01

  Herzog and Generach.

• 1:04:10Speaker 00

  Herzog and Generach. Just kind of come back to the success that I experienced early on there.

• 1:04:16Speaker 01

  Yeah.

• 1:04:18Speaker 00

  Goodness me. Look, they weren't trying to, I don't think anyway, I don't think they were trying to create brand identity. Um, I, I think that that just sort of happened. It just sort of developed out of this pretty vague set of Nazi betrayals and, you know, the understanding that they were wronged by the other one. And I now have to get back at them and I have to beat them whatever it takes.

• 1:04:41Speaker 00

  The thing that sticks with me through all of this is that the origins of course are buried. Sub businesses, they celebrate their origins. They can't wait to tell you the year and the place and the circumstances in which they were founded, but you know, not these two. If I was a betting man, I'd say it's the Nazi stuff.

• 1:04:59Speaker 01

  Probably is. Probably is.

• 1:05:01Speaker 00

  It's probably that.

• 1:05:01Speaker 01

  Yeah.

• 1:05:02Speaker 00

  It is a great story about two brothers who hated each other and went to war using this particular landscape as their battleground, but it's also an incredible lesson about the relationship between brands and consumers. I mean, they advertise elegantly, using people that we admire. We don't question anything.

• 1:05:23Speaker 00

  So who won? You know, I don't think it would be much of a story about a fierce competition without declaring a winner. And I think you probably already know who came out on top. I think it's Adidas. Puma lost in the end.

• 1:05:38Speaker 00

  Best way I know how to do this is to tally up the scoreboard with profit and loss. So let's do that for a second. Adidas was sold in 1990 and then became publicly listed. Puma was sold off the share market in 2007 to PPR, which is controlled by the billionaire Pinot family. They also own Gucci. Most of it was later listed back on the share market, but they kept a stake of about 30%. And I think it's fair to say that they probably wish they had have bought Adidas instead because in the last five years, Puma's share price has gone from 114 euros to about 21 euros.

• 1:06:16Speaker 01

  Good time to buy?

• 1:06:18Speaker 00

  I don't know about that. It's too late, actually.

• 1:06:20Speaker 01

  Damn it.

• 1:06:21Speaker 00

  But, I mean, that's not good in five years. Net income basically disappeared over the last four quarters. The company's racked up about 330 million euros in losses. Now, the new CEO, he said that he wanted to return the company to growth by 2027, but he never really got the chance because that rich family of backers, they ran out of patience. In January of 2026, they sold their 29% share to Chinese company Anta Sports for one and a half billion euros, meaning that that Pinot family lost about 3.8 billion euros over 19 years. And that is ugly.

• 1:06:59Speaker 01

  It's not a spot of change, is it?

• 1:07:01Speaker 00

  No, I mean, even for them.

• 1:07:03Speaker 01

  Yeah.

• 1:07:03Speaker 00

  Like, that's, that is a bad result for somebody who backed Puma.

• 1:07:06Speaker 01

  Big time.

• 1:07:08Speaker 00

  Look, I mean, it might bounce back under that new Chinese ownership, but it seems more likely to stay in a lower tier, I guess, than Adidas. And the last five years have also been pretty rough on Adidas's share price, down about 40%. But the company had net income from continuing operations over 820 million euros in 2024. So it's obviously doing better. Both companies have suffered from market fragmentation. You know, all these new brands like Hocker and ON. But, I mean, I think it's pretty safe to say that Adidas is definitely healthier than Puma. Kind of leaves me thinking what the brothers would think. As mentioned, they never patched it up. Neither did any of their kids. I mean, Adolf and Rudolph, they never spoke again.

• 1:07:51Speaker 00

  They're buried in the same cemetery in Hertzigenach, but they're buried at opposite ends, as far away from each other as possible.

• 1:08:00Speaker 00

  As a result, I mean, we never really get a nice resolution of this story. They never really explained publicly why they hated each other so much. That's why there's speculation dripping throughout. So in the end, it is, as I said in the skit, it's a vague Nazi feud that helped make athletes wildly rich.

• 1:08:20Speaker 00

  That's it. That's the story.

• 1:08:24Speaker 00

  Oh, we did the two truths and a lie. It was number three, obviously, for those who've been listening the whole way through. Stallone was never paid a cent for wearing Adidas in the Rocky movies, which, you know, depending on how you look at it, it's like the best deal ever or the worst deal ever, depending on whose side of the fence you are.

• 1:08:40Speaker 01

  Well, you think about it, if he had taken that deal, would he have made all the movies after it? Because if he made this stupid amount of money, he might have just been like, well, I don't need to make movies anymore. And then we never would have got to see later Stallone.

• 1:08:55Speaker 00

  I mean, it's true. It's certainly interesting to me that he could have figured it out early and then gone, hey, Rocky two, Rocky three, Rocky four, I'm going to be wearing Puma or whatever else he wanted. But he's stuck with Adidas.

• 1:09:05Speaker 01

  Yeah, and we'll be at Rocky 12 now.

• 1:09:07Speaker 00

  We're at Rocky a billion now and, um, you know, I reckon Angelo's driving a brand new Ferrari.

• 1:09:14Speaker 01

  Yeah.

• 1:09:14Speaker 00

  With Adidas one as the licence plate.

• 1:09:18Speaker 00

  Guys, that's Adidas versus Puma story. I want to thank you very much for listening. I'll be back with another story in two weeks. Cheers. Hey, what did you end up paying to be the kit sponsor of Manchester United? Nine hundred million pounds? Holy shit. And how much did you pay to be the kit sponsor of Manchester City? One billion pounds? Guys, settle down. Well, he clearly overpaid. [bleep] you. [bleep] you.

• 1:09:50Speaker 00

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