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Nike to end rival’s run with Yanks
Published May 19, 2008
Nike and the New York Yankees have agreed in principle to a five-year sponsorship agreement that will begin in 2009, the team’s first in the new Yankee Stadium.
The cash and product deal ends a historic 11-year relationship between Adidas and the Yankees that remains one of Adidas’ biggest U.S. sports marketing expenditures.
The 1997 deal began as a rogue agreement and was the catalyst behind the expulsion of team owner George Steinbrenner from baseball’s ruling executive committee and led to MLB’s top attraction suing the league and each of its clubs. It came just after Dallas Cowboys owner Jerry Jones and the NFL settled similar lawsuits and stretched the always tenuous team/league relationship to its limits.
Ultimately, the MLB litigants settled and Adidas became an authorized MLB licensee. Since then, the German athletic footwear and apparel brand used the Yankees to bolster its reintroduction to the U.S. market. Yankee Stadium became an Adidas canvas with signage inside and out and its three stripe logo can still be seen throughout the ballpark.
But with the deal ending, sources said that the Yankees originally tried to sell Nike a signage package, but that Nike was more interested in other rights. Consequently, Nike’s deal with the Yankees is short on branding and long on marketing. Nike will be able to increase the amount of team apparel it already sells as an MLB licensee and it will have a store-within-store shop at the new stadium. It will also run local marketing campaigns, grassroots initiatives, and outfit Yankee coaches and minor leaguers with cleats and other performance wear.
Nike is currently an MLB licensee and also has rights to use MLB marks in ads. The deal does not include MLB jersey rights, but does give Nike the ability to expand its apparel offerings. Nike already has most of the Yankees top stars signed to endorsement deals, including Alex Rodriguez, Derek Jeter, Jorge Posada and Mariano Rivera.
Nike cannot exercise any of the new rights before next season. However, prior to that, Nike will be an unusually active MLB All-Star Game sponsor, running a New York City-themed marketing campaign and outfitting 2,000 volunteers in Nike apparel.
With the Mets moving into their own new ballpark next season, sources said Nike is also talking with them about a similar deal.
Immediately after the original 10-year, $95 million deal was cut in 1997, Adidas officials were fond of pointing out that the deal moved the company’s stock price enough so that it more than paid for itself. Since then, the deal has been recast more than once. And while Adidas has heavy branding in the ballpark, its marketing support of the Yankees has shrunk to almost nothing in relative terms, although it is listed as the sponsor of Ty Beanie Buddy at Yankee Stadium later this year.
The legacy of the deal that roiled baseball’s business side like no other is an intriguing one. “It gave Adi the credibility in the New York market, gave them a great platform and made them real in the noncleated footwear market,” said former MLB Properties President Rick White, now president and CEO of Imperial Headwear, who cut the deal while an independent licensing consultant to the Yankees.