That Reebok NFL jersey you spent top dollar for isn’t official as of April 1 when Nike becomes the new uniform supplier for the NFL, ending the league’s 10-year relationship with Reebok. Financial terms of the five-year deal weren’t disclosed.
In a statement released by the league, Executive Vice President of NFL Ventures and Business Operations, Eric Grubman, said, "We have spent considerable time the past few years rigorously evaluating our apparel business. The new framework will provide fans with a wider breadth of merchandise from global category leaders in the sports-licensed apparel industry.”
Securing licensing rights with a professional sports league is pricey. However, they typically pay for themselves as athletes become unparalleled advertisements.
For 14 years, Steve Ryan served as president of NHL Enterprises, the business arm of the National Hockey League, and oversaw a number of departments, including licensing and merchandising.
“Nike is a global brand and putting its logo on NFL merchandise will accelerate its brand appeal and authenticity,” said Ryan. “As a publicly traded company, I’m sure Nike did a keen financial analysis and will deliver sales and financial growth.”
In addition to jerseys, Nike will make the clothing worn on the sidelines.
Added Ryan, “The NFL is acknowledged as the best professional sports league in the world and this deal reinforces Nike’s leadership role in the marketplace and provides them with a significant revenue stream. Competitively, it also allows them to replace one of their key competitors. This is a major marketing win for Nike.”
Nike and Reebok often battle in the sports-apparel market. Ryan says that this deal doesn’t just bring a fresh perspective to NFL merchandise, it provides an opportunity for greater worldwide exposure.
“An important attribute Nike brings to the table is its international distribution,” said Ryan. “As strong as they are in North America , the company is equally as strong internationally. That’s an area that the NFL wants to grow in, both in licensed products and viewership. So Nike brings better penetration on a global basis.”
According to the NFL’s Policies for Players, athletes are allowed to wear products, such as gloves, manufactured by licensed apparel companies. Ryan doesn’t see that diminishing Nike’s deal.
“I don’t see a downside as Nike has exclusivity on team jerseys and coaches, which are the two most visible in-game, broadcast elements,” stated Ryan. “This is a big win for Nike on a competitive basis, against a major rival in Reebok.”
According to The Nielson Company, 2011 NFL games were watched by an average of 17.5 million viewers.
“For the next five years, the NFL jersey category is off limits and that gives Nike a solid, competitive advantage,” said Ryan. “Nike will dominate the look on the field and have sideline control with coaches…and I’m sure they will do creative things with both.”
Nike will unveil the new looks at an event in New York City
“Fundamentally, Nike must get permission from the teams and league to make changes,” Ryan said. “But I think updating uniforms will be high on the list for both the NFL and Nike. Fans respond positively to merchandise as long as it’s done tastefully and has a consumer appeal. Plus, fans will be the beneficiary of Nike coming along and adding creativity to an area that hasn’t seen a lot of creativity in a while.”
And just when I thought my Randy Moss Raiders’ jersey couldn’t become more worthless.
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