Adidas, the IAAF’s biggest sponsor, has told athletics’ world governing body it is to terminate their sponsorship deal four years early, the BBC has learned.
The sportswear giant informed the IAAF of its decision – understood to be a direct result of the doping scandal sweeping the sport – earlier this week.
Sources have told the BBC the move will result in tens of millions of dollars in lost income to the IAAF.
And it is sure to come as a major blow for embattled president Lord Coe.
Neither Adidas nor the IAAF have made any comment.
The BBC understands Adidas informed the IAAF in November it was considering ending their relationship early as a result of the World Anti Doping Agency (Wada) Independent Commission’s first report, which detailed claims of “state sponsored doping” within Russia.
Earlier this month, the commission’s chairman, Dick Pound, delivered a second, damning report, which revealed that “corruption was embedded” within the IAAF under former president Lamine Diack.
Within days, a decision at the highest level in Adidas was taken to terminate the relationship.
It is understood the German multinational believes the doping revelations in Pound’s reports constitute a breach of its agreement with the IAAF.
The 11-year sponsorship deal was signed in 2008 and was due to run until 2019. At the time of signing, it was reported the deal would be worth about $33m (£23m).
But sources have told the BBC the figure is much higher, and that in terms of cash and product, it is worth about $8m (£5.6m) per year. This would mean the projected lost revenue for the IAAF over the next four years will be more than $30m (£21m).
It is not clear yet whether the IAAF will attempt to challenge the decision in court, although lawyers within Adidas are understood to be preparing for such a move.
The withdrawal of Adidas will come as a major blow to the sport – and to IAAF president Coe – in a time of unprecedented turmoil.
Coe succeeded Diack in August last year and has come under pressure over Pound’s report, which said the IAAF – of which Coe was one of four vice-presidents under Diack for seven years – must have been aware of the corruption.
But despite this, Dick Pound voiced his support for Coe, saying he “couldn’t think of anyone better” to lead athletics out of its current crisis.
The Wada reports on state sponsored doping as well as a French criminal investigation into corruption – which is also looking into the awarding of every World Championships since 2007, including London’s successful bid to host the event in 2017 – have left the sport facing an Olympic year with major reputational damage to repair.
It now seems Adidas believes there is too much reputational risk to its brand to continue its association with the IAAF.
Adidas has also expressed its displeasure at the corruption scandal engulfing Fifa, although it remains world football’s governing body’s oldest commercial partner.
A timeline of events3 December, 2014German broadcaster reveals a documentary exposing Russia’s systemic doping problem11 December, 2014Papa Massata Diack, son of then IAAF president Lamine Diack, steps down after accusations arise over his conduct and whether he was part of a money laundering scandal and involved with blackmailing doped athletes2 August, 2015IAAF data leaked to German broadcaster ARD and Britain’s Sunday Times claims that 12,000 blood samples taken from 5,000 athletes showed instances of cheating5 August, 2015Lord Coe calls the allegations “a declaration of war on my sport” and says the IAAF was not involved in a cover-up19 August, 2015Lord Coe is elected IAAF president4 November, 2015 The Guardian releases a report accusing Lamine Diack of accepting bribes to cover up doping as well as being involved in corruption and money laundering9 November, 2015Wada releases the first report on its investigation into Russia’s doping problem. The investigator, Dick Pound, says Russia’s systemic doping problem is worse than he thought, that the findings are “the tip of the iceberg” and that Russian athletes should be banned from the Olympics13 November, 2015The IAAF suspends Russia from international athletics26 November, 2015Coe steps down from ambassadorial role at Nike22 December, 2015IAAF official Nick Davies steps aside over an email discussing plans to delay naming Russian drug cheats7 January, 2016The IAAF hands lifelong bans to officials involved in the scandal, including Lamine Diack and Russian athletics chief Valentin Balakhnichev14 January, 2016Pound releases a second report, which concludes that corruption within the IAAF “cannot be blamed on a small number of miscreants” and that Diack had been “responsible for organising and enabling the conspiracy and corruption that took place in the IAAF”