Starter Corp.'s 10-K filing with the SEC earlier this
year included the disclosure of its licensing contracts with
the NBA and MLB, according to Andy Bernstein of SPORTING
GOODS BUSINESS. Bernstein reports that Starter's NBA deal
includes "more than" $7M in annual marketing requirements
and "calls for" a 15% royalty for on-court items (11% for
other categories). This season, Starter's "minimum" payout
in product, media buys and sponsorship fees amounts to "more
than" $7.45M, including $2.25M with teams, a $500,000 fee
for "official supplier" status, another $2M in NBA national
TV broadcasts, $500,000 in NBA Properties-owned media,
$200,000 in sponsorship of NBA events and an additional $2M
in NBA-oriented advertising. Some figures of the deal --
which runs through 2001 -- "will be increased through the
term of the contract ... or if Starter reaches certain sales
levels in NBA product." Starter outfits nine NBA teams and
extensive courtside apparel. Bernstein adds that the deal
also "includes reference to supplying product for an NBA
store, which industry insiders say will open late next year"
(Andy Bernstein, SPORTING GOODS BUSINESS, 11/10 issue).
MLB: Bernstein adds that Starter's MLB deal "is not
nearly as demanding" as the NBA package. That contract,
which runs through '99, requires Starter to pay "minimum"
annual royalties of $1.5M, off a 10% royalty for Authentic
Diamond Collection items and 9% for other goods. The
company is also required to contribute $75,000 per year to
the league's co-op ad program ($65,000 in the first two
years of the deal) and purchase full-page ads in MLB pubs.
Other requirements include $1M in TV ad spending, $20,000
per club in "promotional exposure," and $125,000 for MLB's
Fan Fest (Andy Bernstein, SPORTING GOODS BUSINESS, 11/10).
