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New Era CEO Chris Koch Talks Bowl Games, Being Private & NFL Deal

Tuesday, 28 Dec 2010 | 4:25 PM ET

New Era Cap has been family-owned for four generations and CEO Chris Koch, whose great grandfather founded the company 90 years ago, talked to me on and off camera about where the private company is headed before it’s sponsorship of the Pinstripe Bowl this Thursday at Yankee Stadium.

Yankee Stadium
Yankee Stadium
Yankee Stadium

Darren: Why did you decide to sponsor a bowl game?

Koch: We looked at it as getting in on the ground floor of something that will be a historic event. It was a great opportunity to get involved in college football, a bowl game, Yankee Stadium, New York, December. We just thought it all made sense for our brand to attach to college sports.

Darren: How much is this about the business of sponsoring a bowl game and how much of this is about the Yankees?

Koch: The Yankees are an extremely important part of Major League Baseball and are our friends. My dad was friends with George Steinbrenner and when the Yankees came to us about the sponsorship we thought it was perfect. The MVP trophy will be named after my father David Koch and the winner’s trophy will have George’s name on it.

One-on-One With New Era Cap CEO
The New Era Pinstripe Bowl will be held at Yankee Stadium on Dec. 30. Christopher Koch, CEO of New Era Cap, discusses this and more with CNBC's Darren Rovell.

Darren: We mentioned that you’re a family business. I looked at some statistics. Only three percent of family businesses make it to the fourth generation. Has there been talk at all about selling, private equity firms, going public. I always got to ask you this question.

Koch: We talk about it every once in a while, but for the most part, we love what we do. I enjoy what I do. I think that we’ve got great potential to take this company into another level in the next five years and we’re real excited about it.

Darren: In 2005 and 2006, we saw the retro jersey craze lead us into this hat craze and it went nuts. And I think that’s probably still where the height of the craze was. How do you get back to that point or was that something that was just created organically and you can’t really get there by forcing product down people’s throats?

Koch: Well, it might have been created organically, but for us, we’ve grown on that all along. It’s not about getting back. It’s about moving forward. We put a product out that’s different all the time. It’s unique. We allow people to show their individuality and they do that through headwear. It might be the Yankees. It might be about New York. It’s always about wearing something that’s highly customized.

Darren: You recently won the bid to be the exclusive on-field cap of the NFL starting in 2012. Reebok had the rights for the past 10 years. Nike won the apparel rights and they say there’s a lot of growth. You don’t see people at football games with hats on. How much growth is there in the football hat business in the NFL?

Koch: We think there’s a tremendous upside for a company like New Era because of what we do and because it’s not business as usual for us. It’s always about innovation, always something new. It’s always giving people a reason to buy another cap and we think we can do that in the NFL.

Darren: A couple years ago, you were dealing with some public pressure regarding you making a small amount of product for what turned out to be gangs. People would send you their designs and you’d make a small run of it. When the media found out it was a particular gang sign or symbol, they faulted you. Has anything changed in that space?

Koch: We aren’t doing that any more—making products in smaller lots and letting people send us their own designs. It just didn’t make sense to keep updating what the gangs were doing on a regular basis. We do, however, have stars design products and we make a limited edition of those and put them in stores and sell them for $100 or more.

Darren: A couple years ago, you decided to open New Era branded stores. How many do you have now, what is the potential growth and are they profitable?

Koch: We have seven right now in New York City, Buffalo, Toronto, Atlanta and overseas in London, Birmingham, Berlin. And we will be in Tokyo and Hong Kong. We’re thinking about having stores in Chicago, Los Angeles and Miami. We like the experience we provide to the customer, but it’s not like it’s just a marketing loss in our line item. Those stores are run to make money.

Questions? Comments? SportsBiz@cnbc.com

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