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MLB SETTLES ADIDAS SUIT; ANNOUNCES ON-FIELD LICENSEES
Published May 1, 1998
MLB, the Yankees and adidas announced a settlement of litigation which has led to adidas and MLB entering into an industry-wide national license and worldwide advertising rights agreement. The Yankees and adidas filed suit last May against MLB saying the league was interfering with the team's implementation of its 10-year, $90M marketing agreement with adidas. Subsequently, Yankees Owner George Steinbrenner was removed from his position on MLB's Exec Council. The settlement announced yesterday does not include any on-field participation by adidas, but such a role is currently under negotiation between MLB and adidas, among other suppliers. In addition, Steinbrenner will return to his position on MLB's ruling Exec Council (MLB). BIG WIN FOR ADIDAS? The AP's Ronald Blum reports that in the "unannounced part of the deal," the Yankees agreed to pay the legal fees of the commissioner's office, which totaled about $500,000 (AP/DETROIT NEWS, 5/1). NEWSDAY's Steve Zipay calls the settlement a "win for the Yankees and, potentially, a bigger score" for adidas. The company earned an MLBP footwear license and the ability to use MLB uniforms in worldwide ads. It will also keep royalties from sales already made. One former MLB marketer: "Baseball held the fort; nobody ambushed them. But it opens the door for adidas when the other deals expire. Steinbrenner's back in power, so he'll have influence on future marketing and licensing deals" (Steve Zipay, NEWSDAY, 5/1). The WALL STREET JOURNAL calls the deal a "major victory" for adidas as it can "continue its Yankees sponsorship virtually as it was written" (WALL STREET JOURNAL, 5/1). ON THE FIELD: MLBP announced it has extended agreements with Majestic Athletic for T-shirts, shorts, batting practice jerseys and turtlenecks; New Era Caps for headwear; Russell Athletic for game uniforms and Starter Corp. for outerwear. Each deal was extended through '99 with New Era's agreement extended through 2003. New to the '99 program is the creation of a pooled marketing fund for the on-field product line. In the footwear category, adidas, Nike and Reebok have joined MLBP as national marketing partners, retaining the rights to use official MLB uniforms in advertising and promotion in the footwear category. In addition, adidas and Nike entered into an agreement with MLB Int'l to extend those marketing rights overseas (MLB).