Herzogenaurach, in Germany, is known as ‘the town of bent necks’. For years locals would glance down at your shoes before starting a conversation. Here, more than anywhere else, what you wear on your feet matters.
This small German town is home to two sporting dynasties and one of the most infamous family feuds in corporate history. Back in the 1940s an argument between brothers Rudolf and Adolf Dassler gave rise to two rival sportswear companies – Puma and Adidas. Although only one family member remains in either company today – Adidas general counsel Frank Dassler – echoes of that seismic row can still be felt.
“No one knows how it started,” says Dassler, speaking from Adidas headquarters in Herzogenaurach. “They took it to their graves. Some older family members simply talk of a big misunderstanding that was never solved.”
For nearly half a century the family, and the town, were separated in a kind of bizarre logo apartheid – with Adidas on one side and Puma on the other.
Dassler, who is Rudolf’s grandson, recalls: “I can remember my grandfather but I didn’t see my great-uncle much. The battle never ended between the two of them. Back then there was a butcher who served Puma and a butcher who served Adidas. The town was divided.”
Dassler came from the Puma side of the family and even served as president of the company’s US business in his youth. So when he retrained as a lawyer and applied for the top legal post at Adidas in 2004 it was the modern equivalent of Cain taking over Abel’s livestock business. In the eyes of some family members, he had crossed over to the dark side.
“In my family some people weren’t that happy about the Adidas job. Initially there was some bad feeling.”
Fortunately for Dassler, modern Herzogenaurach is a very different place. While his move might once have been tantamount to treason, workers are now relatively free to move between the town’s two biggest employers.
“For young people this isn’t a big thing any more,” Dassler explains. “There’s some rivalry, but not as bad as it was 20 or 30 years ago.”
These days the Puma-Adidas rivalry is commercial rather than personal, as befitting two companies with global multibillion-dollar empires. And Dassler’s time with Puma, far from ruling him out of the Adidas job, gave him vital experience of the sports goods business.
Having spent the previous 15 years before joining Adidas running his own private law practice, Dassler was given little time to settle into his new role. Within a year of taking up the post, he was leading the company through two major pieces of M&A – the sale of winter sports division Salomon for £330m, followed by Adidas’s e3.1bn (£2.45bn)
mega-merger with US rivals Reebok.
One of his first tasks was to choose a corporate adviser in the UK.
“Eversheds became more active when I came into the company four years ago,” Dassler says. “We searched for an M&A expert for two high-profile deals.”
The firm advised Adidas on both transactions, alongside Simpson Thacher & Bartlett in the US, and remains UK corporate counsel.
But probably Dassler’s best-known legal work was during Adidas’s tussle with the International Tennis Federation (ITF) over whether tennis stars could display the famous three-stripe logo on their shirts at Wimbledon. He called on Addleshaw Goddard and partners Michele Boote and Guy Leigh to try to get the ITF’s rules relaxed – and won.
“It allowed the whole industry to use sleeve space for trademarks, which was a pretty good achievement,” Dassler adds.
Adidas continues to use Addleshaws as first port of call for day-to-day commercial advice in the UK.
As for the future, Dassler’s next challenge is the Beijing Olympics this summer. Last month company chief executive Herbert Hainer spoke out about criticism of the event’s sponsors for backing a regime with a questionable record on human rights. He said it was the job of politicians, not sports companies, to pressure the Chinese government on human rights issues.
The sentiment is echoed by Dassler, who says: “Sponsors shouldn’t be expected to solve political issues. We clearly see the limits of our influence. In China, we focus on the protection of human rights, fair labour and environmentally sustainable conditions in the factories manufacturing our products.”
In fact, most of the legal team’s time this summer will be spent working on trademark protection. Adidas already has 10 lawyers in the country working on the issue and has been in talks with local authorities to prevent unauthorised use of its logo.
Meanwhile, the “old war”, as Dassler calls it, is set be revived on the track. Adidas is an official sponsor
of the games, but Puma is also sponsoring competitors. At stake is a slice of the lucrative Chinese market.
While millions watch the world’s top athletes compete for gold medals, all eyes in Herzogenaurach will be focussed a few feet lower than the rest – on the brand of trainer stepping onto the podium.
Name: Frank Dassler
Sector: Sports goods
Position: General counsel and head of environmental and social affairs
Reporting to: Chief executive Herbert Hainer
Turnover: e10.5bn (£8.35bn)
Number of employees: 30,000-plus
Legal capability: 50
1977-85: PR officer, head of research, Puma
1985-87: President, Puma USA
1989-2004: Consultant, The Office of
Frank Dassler, Herzogenaurach
2004-present: General counsel, Adidas