Nike and the NFL: Sizing Up Year No. 1
How important is Nike's deal with the NFL?
Put it this way, when CNBC met with them during Super Bowl week in New Orleans, the company's chief designer Todd Van Horne had some Nike NFL products under lock and key in a steel briefcase.
There is a lot at stake.
Last year, Nike paid $1.1 billion to clothe the NFL for the next five years. If it goes well, some analysts estimate it could mean half a billion in revenue for each of those five years.
"It has done exceptionally well so far," said Sam Poser, who covers Nike for Sterne Agee.
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However, the first year has not been without hiccups.
Take the Robert Griffin III craze. His Washington Redskins jersey sold better than any other in history, but Poser said Nike had to scramble to respond to demand and probably left a fair amount of sales on the table.
"But those are things they learn from," he said. "That won't happen again."
What you learn from talking to the company and the analysts who cover it is that it's a process.
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For instance, by league rules, teams can only change designs once every five years. So, Nike needs to sell into the whole market right away but can't design everything they might want to right away.
And as they design the jerseys on the field and try to sell them to the consumer, Nike also has to begin the design process with every team in the league.
"We work directly with teams and ownership in terms of how they want to present themselves: on their field, their colors, their branding," said Van Horne, who has been with Nike for 22 years. "We work hand in hand with them in that process."
At first glance, it all seems like it should be linear—clothe the players, sell it in stores. But it's not.
The players need the best possible equipment and apparel. Consumers want cool things they can afford. That's why Nike varies the prices points. For jerseys, the closest to the real thing will cost you over $300. But you can also get official jerseys for less than half that number.
"The players, they're the super heroes," Van Horne said. "They're the people that people idolize and want to look like.
"We do bring that exact product for our retail offering that everyday fans can buy."
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Next up: the sidelines.
"The jackets," Van Horne referenced as something to look forward to in 2013. "What the players are wearing, warming up in—just their full range of what they do during the day.
"We just got here. We've come a long way, and we've got a long way to go."
—By CNBC's Brian Shactman; Follow him on Twitter: @bshactman