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Volume 21 No. 17
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NFL: Another record year for merchandise

Despite lagging sales for some licensees and injuries to marquee players like Odell Beckham Jr. and Aaron Rodgers, 2017 still will prove to be a record year for NFL Consumer Products, according to division chief Chris Halpin.

 

The reasons: Electronic Arts and Panini posted record years; Fanatics dominated online retail; and the Philadelphia Eagles provided a vibrant market for championship products, easily exceeding even the most optimistic projections.

Other than demand — pent up since 1960 — why did Gang Green generate so much, er, green?

“This Eagles team has an authentic connection to their hometown and fan base,” Halpin said on Super Bowl Saturday at the NFL’s annual Consumer Products Brunch. “A win there would be a seminal moment.”

The Eagles sent product sales soaring.

Two days before the Super Bowl, Fanatics founder and Executive Chairman Michael Rubin was equally as bullish on the NFL market, saying that his company’s January NFL sales were up almost 30 percent compared with last year, and not including last year’s Majestic acquisition.

Rubin described a hot Philly market as his company’s best. As it was tracking last week, it was both the league’s and Fanatics’ best NFL championship market ever, with sales up more than 60 percent over 2017, and trailing only the Chicago Cubs World Series title for Fanatics hot-market sales. Moreover, in 2017, during which NFL sales lagged for many apparel licensees, Rubin said Fanatics grew NFL sales by mid-single digits.

“Traditional broadcast ratings are down, traditional brick and mortar retail is screwed, and the entire apparel category is challenged,” Rubin said. “Add up all the NFL content being consumed on TV, digital, and social. Fandom for sports is stronger than ever. But if you’re looking to monetize that, you just can’t do it in the same old ways.”

As for those licensees feeling some pain:

“Demand for our products isn’t decreasing, but the traditional retail landscape is,” Halpin said. “We’re encouraging licensees to develop their direct-to-consumer business, because [selling through] traditional wholesaling is going to be increasingly challenging. The ones that built their own direct-to-consumer businesses are capturing that shifting demand.’”

Other licensees, however, continue to point to lagging “futures” orders as a daunting omen. That could spell challenges ahead for the 2018 season.

“The hot market will make a big difference for us, but the bigger concern is next season,” said a longtime NFL apparel licensee. “Will there be excess inventory and will they buy less then, because of this season’s trend?”

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NEW JERSEY? Nike’s gargantuan deal for on-field NFL rights expires after two more seasons, and renewal discussions already have started. Nike has the preponderance of NFL players under contract, and is expected to renew simply for the association, reach and exposure having its swoosh on NFL fields affords.

“I would take the over, with Nike continuing,” said one licensee executive.

Could Adidas make a play that big, in search of additional U.S. credibility? Maybe Fanatics, in which the NFL is an investor, would be interested, possibly teaming up with Under Armour (or even Adidas?), similar to its deal with MLB? Keep in mind that Under Armour’s financial health is considerably worse now than it was in 2016, when it signed the deal that will put its brand on MLB jerseys, starting in 2019.