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SBJ/September 12-18, 2011/Marketing and Sponsorship
Reebok's final year with NFL could be brand's best
Published September 12, 2011, Page 1
The last year of any licensing deal is mixed at best, and with the likelihood of the NFL missing games increasing as the lockout dragged on, it looked like the last year with the NFL would be Reebok’s worst. Now, like so many NFL partners, licensing executives at the Adidas subsidiary have a whole new take. Their sign-off with the NFL before Nike and New Era take over for the next five years could be one of the company’s best.
Those involved when Reebok signed its current deal recall that Nike was so convinced it was the sole bidder it was insisting on any number of branding imperatives, including replacing the league’s venerable Wilson pigskin with a swoosh-i-fied football.
“It took a lot of convincing on the part of Paul Fireman,” recalled former NFL licensing head Mark Holtzman, now executive director of non-baseball marketing for the New York Yankees. “In the end, we convinced him we were changing the model and Reebok would be the beneficiary — and they were. Their guarantee turned out to be 25 percent of their NFL business.”
When Reebok took over the jersey and cap exclusive, the entire industry was over-licensed. Product was oversaturated at retail, and many large licensees were — or were about to be — bankrupt or sold. Accordingly, price points and product innovations were suffering.
“Every league was operating on a ‘Some is good, so more is better’ philosophy,” said Tom Shine, Reebok senior vice president, who sold the remnants of his bankrupt Logo Athletic licensed brand to form the start of Reebok’s NFL licensed business. “We came in as one of four or five licensees with jersey rights, so our mission was to clean things up, and we did.’’
Holtzman, himself a former Reebok executive, added, “They segmented well and the exclusive rights enabled them to spend marketing dollars against it.’’
Over its decade as the NFL’s largest apparel licensee, Reebok gets kudos for cleaning up distribution, restoring price integrity and making an NFL jersey at various price points a must-have for an even wider range of NFL fans.
“If you look at photos of NFL stadiums 10 years ago and now, you can see that together we got a lot more fans to feel like wearing a jersey to a game was part of bringing home a victory,’’ said NFL consumer products chief Leo Kane.
Reebok increased jersey sales every year of the deal, according to Baxter, while lessening the overall dependence on jerseys. Kenny Gamble, vice president and general manager of the sports licensed division at Reebok, said the ratio of jersey sales to other Reebok NFL apparel went from 70/30 at the beginning of the deal to its current 55/45. “We worked hard to add consistency, even while adding jerseys at different price point and things like pink jerseys for women,’’ he said.
Accordingly, during Reebok’s tenure, sales of NFL licensed apparel reached new highs. All that growth occurred while the outerwear business, the big jackets and heavy parkas that had buoyed licensed sales and carried higher price points, vanished from licensed sports retailers. “It’s all about layering now,” Baxter said. “Quilted outerwear is pretty much extinct.’’
Reebok’s product legacy includes the Belichick hoodie, as well as the Sharktooth and the Paintbrush sideline caps.
On the product side, those involved recalled smash sales hits like Bill Belichick’s hoodie, with the Patriots coach choosing to wear the unconventional oversized Reebok sweatshirt and cut off the sleeves. While he was often mocked for the less-than-polished fashion look, because of the team’s on-field success and Belichick’s consistent TV appearances during the Reebok decade, the hoodie turned into a pop-culture discussion piece.
Another hit was a name-number T-shirt, but that may have cannibalized jersey sales.
An endless variety of caps, including caps released around the NFL draft, capitalized on the widespread appeal of rookies to
One of Reebok’s highlights was meeting heavy fan demand for Brett Favre’s New York Jets jersey in 2008.
“The coaching business changed, and we transformed from the Marv Levys to guys like Jon Gruden,’’ said Eddie White, vice president of team properties at Reebok and Adidas for 19 years. “We had cooler guys wearing cooler stuff. They were better runway models.”
A highlight for Baxter was the unprecedented demand created when Brett Favre was traded to the New York Jets during the summer of 2008, creating an all-time demand for hundreds of thousands of jerseys.
With the NFL as a cornerstone of a licensing business of $500 million, the question of what’s next for Adidas/Reebok licensing is an intriguing one, especially with the NBA, Adidas’ most important American license, experiencing it own labor pains.
Baxter is looking for eventual growth from the NBA, along with the NHL, MLS and the collegiate business, as well as institutional team business for high schools.
“We won’t offset volume by any means in year one or two post-NFL, but there’s still a significant business here, with a nice growth trajectory,” Baxter said. “All things being equal, I don’t know anyone who doesn’t want the NFL as a business partner, but we still have a very positive outlook here.”