SBD/1/Sponsorships Advertising Marketing

MLB SETTLES ADIDAS SUIT; ANNOUNCES ON-FIELD LICENSEES

          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).

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