SBJ/April 9-15, 2012/Marketing and Sponsorship

Denson leads Nike's charge into the NFL

While there was wide anticipation that Nike’s new NFL uniforms would be something along the lines of those designed for the University of Oregon, the company last week revealed fairly traditional unis to mark the first of a five-year rights deal with the league. At the unveiling in Brooklyn, Charlie Denson spoke with staff writer Terry Lefton about combining two of the most powerful brands in sports.

Denson said Nike has opened two new distribution centers dedicated to the NFL.
Nike lived without NFL rights for more than a decade. Tell me about your internal decision to make what some considered a pre-emptive bid to regain those rights.
: Obviously, the NFL has done a tremendous job building their franchise and certainly we’ve continued to work with their players and had [on-field] NFL footwear and glove deals. When we looked at our business here in the United States, this represented one of those material opportunities. We looked at it through many lenses: promotionally, financially, even emotionally, and they each passed our check mark test. So we went after it. … We had some pretty high expectations and the initial [retail] response has exceeded those. So we’re feeling pretty good.

So would you consider your NFL deal a marketing expense or a business expense, or both?
: It’s always a little bit of both. And the other thing that may be overlooked is the ability to work with the best and elite athletes. We have great relationships with some of the top college programs and the NFL is a complement.

Nike unveiled its new NFL uniforms that largely stayed with tradition. The uniform for the Seattle Seahawks introduced the most changes.
The questions people are asking in terms of Nike taking over the NFL apparel rights are about distribution and your ability to handle hot-market products …
: Organizationally, we did not take this lightly. We’ve staffed up and opened two new distribution centers wholly dedicated to this property. The amount of business that needs to be done on a quick-turn basis is one of the keys to overall success in this market, so we’re not underestimating that. We’re making the appropriate investments and we’re learning a few things, too.

Considering the startup costs, how soon can Nike make money with this? In the first year?
: Yes, I think so. This is a property that is pretty well-developed, so our expectations are that we can move into this relatively quickly and relatively profitably. We will see incremental growth after that, as we expand the property across a broader range of sportswear and fan wear.

Generally, the uniforms look similar, with the exception of Seattle. What’s going to be different about Nike’s NFL apparel?
: We hope the difference will be on the field. We’ve spent a lot of time getting feedback from players and the ambition is to try to make a real jump forward in terms of the technical merits of the uniforms on-field — that’s where most of our time has been spent, to date. The opportunity to leverage the look on-field and the popularity of the NFL across a broader product line is our overall long-term ambition.

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