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Volume 22 No. 23
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NHL lands equity stakes in Fanatics, Outerstuff

Deals part of a new consumer products model for league

Undergoing a wholesale strategy change to its consumer products model, the NHL has signed new partnerships with Fanatics and Outerstuff that include equity stakes in both companies.

The deals, which also include the seven-year jersey and apparel deal with Adidas announced last week, provide the NHL with more than $80 million in guarantees each year beginning with the 2017-18 season, tripling the terms of the previous deals, according to sources familiar with the three partnerships. The NHL declined to comment on the deals.

The Fanatics and Outerstuff deals were presented to the league’s board of governors during their annual meeting in

The league gained equity stakes in Outerstuff and Fanatics.
July but were just verified by sources last week.

The three deals represent a significant strategy shift for the NHL as it looks to move away from a model locked in brick-and-mortar distribution to one that is more nimble and focused around e-commerce.

It also shifts how the NHL will approach licensing. The league recently underwent a McKinsey Consulting study of its licensing practices, which found that decreasing its number of licensees could result in a better yield for the league. Following the results, the NHL began raising questions regarding the effectiveness of having numerous licensees in the same category and if it was yielding too much leverage to retailers.

The result likely will be a reduction in overall licensees, with Adidas acting as the official supplier of licensed apparel and headwear, and having sporting goods store exclusivity. Fanatics will sell Adidas and Outerstuff products through its portals, and has the rights to products that the other two deals don’t cover.

In the NHL’s previous jersey and apparel deal with Reebok, the company sublicensed NHL youth apparel to Outerstuff, which specializes in the youth market. By now working directly with Outerstuff, the NHL will be able to work more closely in the distribution and manufacturing of the products.

The shift in strategy will look to provide a jump-start to the league’s consumer product and licensing division, which has been outpaced by the other lines of business that make up the league’s national revenue such as leaguewide sponsorships and media rights deals. While the league’s overall national revenue has seen growth upward of 20 percent annually the last few years, the consumer products business saw about 3 to 4 percent growth annually.

The NHL’s deal with Outerstuff follows one signed between the company and the NFL earlier this year. In that deal, the NFL made a seven-figure investment in Outerstuff. Similar to the NHL, the NFL’s youth apparel lines had been sublicensed in its previous apparel deal, but the league used its latest apparel deal with Nike to carve out the youth category. Outerstuff also has licenses with the NBA, MLS, MLB and the U.S. Olympic Committee.

Fanatics services every big stick-and-ball league’s e-commerce needs, NASCAR and more than 150 college and pro teams, along with its own site.