MLB, the Yankees and adidas announced a settlement of
litigation which has led to adidas and MLB entering into an
industry-wide national license and worldwide advertising
rights agreement. The Yankees and adidas filed suit last
May against MLB saying the league was interfering with the
team's implementation of its 10-year, $90M marketing
agreement with adidas. Subsequently, Yankees Owner George
Steinbrenner was removed from his position on MLB's Exec
Council. The settlement announced yesterday does not
include any on-field participation by adidas, but such a
role is currently under negotiation between MLB and adidas,
among other suppliers. In addition, Steinbrenner will
return to his position on MLB's ruling Exec Council (MLB).
BIG WIN FOR ADIDAS? The AP's Ronald Blum reports that
in the "unannounced part of the deal," the Yankees agreed to
pay the legal fees of the commissioner's office, which
totaled about $500,000 (AP/DETROIT NEWS, 5/1). NEWSDAY's
Steve Zipay calls the settlement a "win for the Yankees and,
potentially, a bigger score" for adidas. The company earned
an MLBP footwear license and the ability to use MLB uniforms
in worldwide ads. It will also keep royalties from sales
already made. One former MLB marketer: "Baseball held the
fort; nobody ambushed them. But it opens the door for
adidas when the other deals expire. Steinbrenner's back in
power, so he'll have influence on future marketing and
licensing deals" (Steve Zipay, NEWSDAY, 5/1). The WALL
STREET JOURNAL calls the deal a "major victory" for adidas
as it can "continue its Yankees sponsorship virtually as it
was written" (WALL STREET JOURNAL, 5/1).
ON THE FIELD: MLBP announced it has extended agreements
with Majestic Athletic for T-shirts, shorts, batting
practice jerseys and turtlenecks; New Era Caps for headwear;
Russell Athletic for game uniforms and Starter Corp. for
outerwear. Each deal was extended through '99 with New
Era's agreement extended through 2003. New to the '99
program is the creation of a pooled marketing fund for the
on-field product line. In the footwear category, adidas,
Nike and Reebok have joined MLBP as national marketing
partners, retaining the rights to use official MLB uniforms
in advertising and promotion in the footwear category. In
addition, adidas and Nike entered into an agreement with MLB
Int'l to extend those marketing rights overseas (MLB).
