German sports brand to end sponsorship of Israel’s national football team

(The Financial Times) German sports brand says decision was taken for business reasons and not related to consumer backlash

Puma is terminating its sponsorship of Israel’s national football team in a decision the German group said was taken a year ago and was not related to renewed calls for consumer boycotts, as Israel continued its assault on Gaza in response to the October 7 Hamas attacks, The Financial Times reported on Tuesday.

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From next year the world’s third-biggest sportswear company will no longer provide kit to the squad after deciding not to renew a contract with the Israel Football Association, according to an internal note seen by the Financial Times.

The partnership signed in 2018 triggered a boycott campaign, with activists accusing Puma of supporting Israeli settlements in the West Bank — considered illegal by most of the international community — given the IFA includes clubs based in such settlements.

Puma has rejected the allegations, saying that it only sponsors the national team and not club-level activities.

The brand’s stores in some western cities have been targeted with demonstrations in recent weeks, highlighting the pitfalls that geopolitical issues can create for multinational companies.

Following a similar backlash from pro-Palestinian activists in 2021, Ben & Jerry’s announced it was “inconsistent with our values for Ben & Jerry’s ice cream to be sold in the Occupied Palestinian Territory”. Its owner Unilever eventually sold the local branding rights to a licensee, which continues to sell the ice cream in the region.

However, Puma’s decision to ditch Israel’s national football team was made for financial reasons, according to people familiar with the internal discussions who said it was part of a broader “fewer-bigger-better” strategy to become more selective in sports marketing.

Puma, which lost its most prominent national team Italy to Adidas in 2022, will announce a new partnership with a high-profile squad soon, according to the memo.

The company will also “discontinue to work with some other national teams”, the document said, citing commercial reasons, the sides’ participation in major international tournaments, “or where we have simply not been able to agree on the terms to extend the partnerships”.

Apart from the 1970 World Cup in Mexico where it was knocked out at the group stage after scoring a single goal, Israel’s national football team has not qualified for any major international football tournament.

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Israel’s market for kit sales, a main driver of sponsorship deals with national football associations, is also limited given Israel’s 9.7mn population, according to people familiar with the matter.

Puma, which will also terminate its sponsorship of Serbia’s national side next year, will continue to “evaluate all other existing partnerships as well as any other upcoming opportunities to ensure we have a strong roster of national teams”, the memo said.

The company, whose sales of 8.4 billion pounds (GBP) in 2022 were almost double the level in 2018 when the calls for boycotts began, declined to comment. The Israel Football Association did not respond to a request for comment.