From the MLB All-Star Game, Washington, D.C.
Nike and Major League Baseball have a verbal agreement to take over on-field uniform rights, which will put the swoosh on MLB jerseys beginning with the 2020 season, according to a variety of industry sources gathered in Washington, D.C., for last week’s All-Star Game.
The deal is expected to be completed and signed before the end of this season.
What was said to be an agreement for 10 years will follow the blueprint of Nike’s recently extended and realigned NFL rights. That deal has Nike directly servicing teams’ apparel needs, with Fanatics being granted comprehensive rights for all Nike-branded jerseys and fanwear sold at retail.
For Fanatics, the deal represents a further rollup of principal industry rights. For Nike, it’s a different formula for licensing, at least with the NFL and MLB. Outsourcing any rights means “brand protection is critical” for Nike, said one source familiar with the deal. “Assuming those protections are provided, you’ll see just as much Nike-MLB product at retail. So it’ll be the same benefit [to Nike] from a marketing perspective, with better margins.”
MLB licensing chief Denis Nolan would not consent to an interview in Washington.
The pending on-field rights deal means Nike’s trademark will be emblazoned across NBA, NFL and MLB uniforms by 2020 — an unprecedented land grab across American pro sports. Nike already has around half of MLB players on its roster of endorsers, and its swoosh-emblazoned “underlayer” shirts have given the company unique branding on MLB fields for years.
For MLB, the deal means marketing powered by Nike’s creative and a budget unrivaled in the category at a time when the league is desperate to engage youth.
In late 2016, MLB signed Under Armour to a 10-year, $50 million-a-year deal for those same on-field rights, but since then, UA’s market cap has declined precipitously, from $11.03 billion to $9.26 billion. UA’s exit from what was to be its first significant on-field branding play in the major stick-and-ball pro sports is the latest in an unwinding of rights deals over the past few years, after a period of heavy spending.
For a company based in nearby Baltimore, UA’s presence during All-Star Game festivities was underwhelming, although it did get some valuable exposure when Bryce Harper triumphed in the Home Run Derby while wearing UA Harper 3 cleats.