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Russell Inching Closer To Completing $65M Deal With Spalding
Published March 31, 2003
Russell Athletic "is near a deal to pay" $65M for Spalding's "non-golf businesses, including the rights to manufacture and market the NBA's official basketball," according to Terry Lefton in this week's SPORTSBUSINESS JOURNAL. Sources said that the companies "are in an exclusive negotiating period" and that a deal "would close within a month or two." Sources added that Russell "won the business after outbidding" Wilson, K2, Fotoball and others. Nike and Reebok also both "looked at the Spalding deal, but passed." The acquisition "includes about $10[M] annually in licensing revenue for deals including Spalding branded footwear." Lefton: "Just as Rawlings' rights to market the official baseball of MLB figured prominently in its recent purchase by K2, so too were Spalding's 19-year-old NBA rights critical to Spalding's suitors." Sources said that some prospective buyers lost interest when they "couldn't gain assurances that Spalding's NBA license, which runs through the 2004-05 season, would be extended." The league has indicated it "will approve a transfer of the license to Russell, but not an extension, feeling it would be worth more in a competitive bidding situation." One source said, "There's no visibility on the puck in the NHL, little or none on the MLB baseball, some for Wilson on NFL football, but nothing compared to Spalding's name on the NBA basketball. That's what makes this deal so valuable" (SPORTSBUSINESS JOURNAL, 3/31 issue).