Nike Will Have Exclusive NFL Apparel Rights
The NFL announced Tuesday that Nike will be the official uniform provider of the NFL beginning in April 2012. As CNBC reported Monday, Nike will produce all on-field apparel including game uniforms and base layer, as well as sideline personnel apparel and fan gear.
As part of the deal presented before NFL ownership Tuesday morning in Chicago, New Era will be the official on-field headwear supplier and will produce hats for the sidelines and for fans.
Under Armour will continue to outfit players for the NFL combine.
All the deals run for five years.
“We have spent considerable time the past few years rigorously evaluating our apparel business,” said Eric Grubman, the NFL’s executive vice president of NFL Ventures and Business Operations, said in a statement. “The new framework will provide fans with a wider breadth of merchandise from global category leaders in the sports licensed apparel industry.”
Nike shares hit an all-time high of $83.40 Tuesday thanks in part to the news. The shares have since pulled back slightly.
Reebok will maintain its rights to the uniforms until its 10-year, $300 million deal expires before the 2012 season. Shares of Adidas, which owns Reebok, fell the sharpest in more than three months on yesterday's reports that the company would be out of the NFL business.
"Reebok has enjoyed a long and very successful NFL partnership," Adidas said in a statement. "Over the last decade, we have revolutionized and modernized the sports licensing business, introducing new fan categories, retail formats and new uniform technologies, en route to more than doubling the size of the NFL’s former licensed sales. We are extremely proud of what we have been able to accomplish together."
Other companies that have been granted licensing rights include GIII, VF, Outerstuff and '47 Brand.
Although the league has awarded licensing rights, there's actually a legal question as to whether they even have the right to do so. In May, the U.S. Supreme Court sent the American Needle v. NFL case back to the lower courts to decide if the NFL's awarding of the Reebok contract in 2001 was an antitrust violation. Given the money involved if the league lost the case, it's expected that the NFL might eventually settle with American Needle, a hat company that objected to the exclusive rights arrangement. Lawyer Meir Feder, who represented American Needle in the Supreme Court in the case, declined to comment.
Questions? Comments? SportsBiz@cnbc.com