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Volume 22 No. 7

Marketing and Sponsorship

Buzz from the recent baseball Winter Meetings is that the deal granting Nike Major League Baseball’s on-field apparel rights is well down the third-base line and will be completed before the end of the year, perhaps as soon as this week. What will be a 10-year contract will begin with the 2020 season and add MLB to Nike’s powerful collection of on-field exposure rights that also includes the NBA and NFL — all of which will be locked up by Nike in similarly long-term deals.

 

One of the biggest reasons the Nike-MLB deal took so long to finalize was unwinding Under Armour, along with the complex rights-sharing agreement with Fanatics.

  

Nike’s MLB rights are now focused on camera visibility and the credibility provided by supplying uniforms and practice apparel to the world’s most elite baseball, basketball and football players. Retail rights have been outsourced to Fanatics, following the blueprint of Nike’s NFL rights deal. With MLB, Fanatics’ impressive collection of sports-licensing rights will become even more compelling. By 2020, Fanatics will control retail sales and distribution for MLB and NFL authentic (on-field) jerseys, as well as replica jerseys for all four major U.S. stick-and-ball leagues.

 

Nike, not Under Armour or Majestic, will have its logo on MLB jerseys in 2020.
Photo: Getty Images

As has been the case with other recent MLB licensing issues, we’re hearing that Commissioner Rob Manfred has been very involved, which wasn’t the case with consumer products and licensing when Bob Bowman was president of business and media from 2014 until last December.

 

In teaming with MLB, Nike will add considerable marketing muscle and expertise to the league’s youth marketing efforts, and add some performance know-how to the league’s uniforms. “Some of Nike’s college baseball uniforms are better from a performance perspective than what is in MLB now,” a licensing industry source said. “That’s going to change.”

 

There’s a few “equal and opposite reactions” we’ll be looking for after the Nike-MLB deal gets past the phalanx of attending lawyers. We’re curious about what Under Amour’s reaction will be. Originally, a new MLB on-field deal starting with the 2020 season was signed with Under Armour in 2016. However, a sales slump and a shrinking market cap caused Under Armour to back out of the deal. With Nike on the field, and sales recovering to some degree, will Under Armour look to sign more MLB endorsers, adding to a roster that already includes Bryce Harper, Buster Posey and Cal Ripken?

 

Also, the Swoosh on field means the end of the Majestic brand on MLB diamonds, where it has been for decades. Fanatics acquired Majestic from VF Corp. last year, so it will be interesting to see where that venerable sports licensing brand ends up. Whatever happens, look for Majestic-branded MLB jerseys to be marked down considerably as the 2019 baseball season progresses.

 

DANNON DEAL: Octagon loses a long-term client with almost the same frequency as a Halley’s comet appearance, but industry sources tell us that GMR has quietly wrested Dannon Yogurt’s NFL activation from Octagon. GMR, which refused to comment, will start consumer activation and corporate hospitality activities around next year’s Super Bowl Week in Atlanta. It’s GMR’s first NFL sponsorship activation since it helped with SAP’s NFL rights several years ago.

 

Octagon spearheaded the strategy and negotiations that saw Dannon signed on as the NFL’s “official yogurt,” with rights that began in 2015. Originally, Dannon activated NFL rights across its brand portfolio. More recently the sponsorship has been largely behind its Oikos Greek yogurt brand, using Dallas Cowboys quarterback Dak Prescott in ads.

 

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.