Nike has signed a deal that will have the country’s leading sports brand supplying uniforms and all other apparel for all but two of the Arena Football League’s teams beginning next year, AFL officials said last week.
The three-year pact could be valued as high as $5 million, sources said, including licensing guarantees, value of the product, and the option to buy time on NBC’s AFL telecasts. Nike is not required to buy media under terms of the deal.
Separately, the league has signed its first trading card licensee. Upper Deck has agreed to a five-year exclusive agreement under which it will produce and sell AFL collectibles and memorabilia, AFL officials said. The league also is close to a deal with sports video game category leader Electronic Arts, according to people familiar with the plans.
EA officials had no comment.
“It’s taken 18 years to get here, but I consider this the launch of our national retail business,” said AFL executive vice president Glenn Horine, who would not comment on any negotiations with EA. “From a relevance and a credibility standpoint, it is key for us to really establish our consumer products business, and we’re hoping Nike can really add to our game by giving us unique and innovative equipment along with an expanded retail presence. We will no longer be an in-arena, concession-based property.”
The deals come a week after the AFL and NBC renewed their broadcast agreement through 2006 and just as the AFL is completing its regular season. The playoffs begin this weekend.
The estimated seven-figure deal with Nike compares with a renewal signed earlier this year with ADT valued at $16 million over three years, though that deal includes media and a uniform patch.
“This is an indication that the AFL is coming of age,” said Ray Katz, a former NFL marketer who is now director of sports marketing at OMD’s Optimum Sports unit. “With the [younger] demos you can reach there, the sponsor interest is attractive.”
While the first comprehensive on-field apparel deal in the AFL’s 18-year history enhances its legitimacy, an executive involved in the negotiations said Nike’s motivation was simple: It can make money through sale of AFL-licensed product in the first year of the deal.
“There’s instant pro-fit ability, and everyone seems to think the league has an upside, so it works,” the source said.
Signing on as the AFL’s official uniform, sideline headwear and sideline apparel supplier also gives Nike additional on-field TV exposure, which it will lose when its NBA uniform deal expires after this season.
The AFL’s Dallas franchise has a uniform deal with Atletica; its Philadelphia club has a uniform deal with Mitchell & Ness. Both pre-existing deals will continue, but Nike will outfit the rest of the league’s 19 teams and will sell on-field and AFL Authentic apparel at retail for the first time.
Teams outside Dallas and Philadelphia have a hodgepodge of uniform-purchase deals with the likes of Russell Athletic and Wilson.
The Nike deal represents an expansion of an earlier three-year pact under which the company attained exclusive rights to supply AFL footwear, gloves and other performance wear. There is also a commitment for Nike to develop a distinct AFL uniform silhouette, along the lines of the new ball developed by AFL partner Spalding.
The Nike products, which won’t be available at retail before the beginning of the 2005 season, will include replica and authentic jerseys, T-shirts, caps and polo shirts. Replica jersey rights will be shared with existing rights holder Majestic Athletic.
With two advertising patches already on AFL jerseys (one national, shared by ADT and U.S. Army; one for local advertisers), the question remains as to where Nike’s swoosh ends up on new league jerseys.
Upper Deck will launch its deal with promotional cards to be distributed during the AFL playoffs. A full card set is expected early next year. It will work with the NFL Players Association to include cards of AFLers who later matriculated to the NFL.
