Helmet Manufacturer Riddell Seeing Steady Profits Despite Concussion Concerns
Revenue at helmet manufacturer Riddell has grown by more than 40% since '09 to more than $200M, due to "high-tech helmets, demand for more protective gear and higher price points for some products," according to Danny Ecker of CRAIN'S CHICAGO BUSINESS. While costs from "concussion-related litigation and the resulting increased insurance premiums are hurting, parents' willingness to pay for top-of-the-line equipment is preserving the company's profits." New sales and "reconditioning of used football helmets" make up more than 50% of revenue at Riddell, a subsidiary of Easton-Bell Sports. Riddell's "25-year sponsorship deal with the NFL expires at the end of this season." Sales of the Riddell 360, the company's top-of-the line helmet, are "up 20 percent year over year." The Chicagoland Youth Football League President Geoff Meyer said that more parents are fundraising to purchase "top-of-the-line helmets" besides less expensive helmets covered by league fees. As a result, Riddell is "seeing stronger sales from stores such as Sports Authority and Dick's Sporting Goods." Still, most of its sales "come from 250 reps nationwide who work with teams and leagues." Riddell was "named in some of the lawsuits that were part" of a recent $765M settlement between the NFL and more than 4,000 ex-players over concussion-related claims filed against the league since early '11. It "still faces claims from hundreds of those plaintiffs," and other cases "are popping up." The company's legal costs "are leading to higher liability insurance premiums." Riddell also has a lawsuit "against 29 of its previous insurers to get a court order requiring them to defend and indemnify the company in lawsuits from NFL players over head injuries suffered decades ago" (CRAIN'S CHICAGO BUSINESS, 10/7 issue).