(Story updated to add that Sterne Agee recently raised its "buy" rated price target on Nike to $125.)
BOSTON (TheStreet) -- The 2012 Olympic Games in London have begun, even though the events aren't scheduled to start until July.
That's because athletic-shoe and apparel companies such as Adidas and Nike (NKE) are already competing over who can wear their companies' logos on their uniforms standing on the medals podium. That sort of brand recognition earns gold in the form of higher sales for years to come.
This year is especially important, as the Olympics coincide with the European soccer championships, another infrequent, but giant, opportunity to wave their brands in front of a worldwide audience. Adidas is making the biggest bet on this summer's events, as it's the official sponsor of both the Olympic Games and the UEFA European soccer tournament that begins in June in Poland and the Ukraine. Adidas' CEO, Herbert Hainer, said in conjunction with the German firm's fourth-quarter earnings report Tuesday that "there is always great buzz and excitement around major sports events and they don't come bigger than the London 2012 Olympic Games and the UEFA Euro 2012." So, as the Olympic sponsor and official provider of many national teams, Adidas claims the right to make the athletes wear only its gear on the medals podium, although they can race in whatever shoes they want. And that has prompted one longtime Nike-sponsored athlete and potential medalist to threaten to go barefoot instead. That may sound silly, but there's a lot at stake. The Olympic viewing audience alone is expected to be in the billions, giving the firms a high profile in the fastest growing markets, such as Asia. And it's big in the U.S. as well, because the 2008 Beijing Olympics was the most watched television event ever in the U.S. NPD Group, a marketing-research firm, said in its most recent Global Sports Estimate report that sales of sports equipment, including apparel and athletic footwear, was $315 billion in 2010, a 4% gain over 2009. "Companies may not gain a lot by being there, but stand to lose even more if they are not," said Marshal Cohen, NPD's chief industry analyst, in an email. "The Olympics can bring a boost of 10% growth essentially for 'catching lightning in a bottle,' " he said, which means, "a prominent placement of a logo in an iconic photo seen around the world."
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