Nike said yesterday that it "has broken off
negotiations" with the NFL and "expects to finish" the 2000-
01 season, its fifth as an on-field licensee, as a "lame
duck in terms [of] on-field exposure," according to Terry
Lefton of BRANDWEEK ONLINE. Lefton reports that Nike had
been negotiating "since late last year on a new agreement,"
but with the licensed apparel market "at a nadir, Nike was
unwilling to continue the current arrangement and instead
proposed a radical plan for a joint venture." Under that
proposal, Nike would have paid "nothing -- neither rights
fee nor guarantee -- and get exclusive rights to manufacture
all NFL-licensed apparel, with the swoosh on everything,
including the game balls." Nike Team Sports (NTS) President
Mark Hampton: "This was strictly an economic decision. We
believe that some kind of shared venture is the only way
that it's economically feasible to make money in this
market." Hampton said that NFL merchandise makes up about
25% of NTS' business. Lefton adds that the "collapse" of
Nike/NFL negotiations "leaves the NFL with few choices for
selling on-field rights," as adidas "seems unlikely to
expand [its] commitment" and Reebok "faces little
competition to bid up the price." But Lefton writes that
Nike has renewed an agreement "giving it use of NFL marks in
ads and putting Nike footwear on NFL fields through the 2005
season." Lefton: "More than half of NFL players wear Nike
shoes on the field" (BRANDWEEK ONLINE, 6/20).
