Aaah Fall: changing colors, dried leaves, hot apple cider, pumpkin carving, and one of America’s favorite past times, football. Now in the middle of its highly coveted season, the NFL has decided that beginning April 2012, seven different companies, minus current licensor, Reebok, will share the rights to the league’s apparel licensing. Nike will have the NFL’s on-field apparel rights. Nike will be responsible for game uniforms and base layers, sideline personal apparel and fan gear. And while the deal may not give Nike a huge financial boom, the company’s infamous check logo will be continuously visible to millions of viewers as the camera switches shots from players to coaching staff. Marketing wise, Nike will gain tremendously from their agreement with the NFL. As Nike’s Charlie Denson stated, "Nike's position in our largest market in the world will be stronger then ever. We believe our agreement with the NFL enhances the Nike brand, and provides significant opportunity to drive growth across the business."
In addition to Nike, this agreement will have advantages for the NFL and fans alike. Due to weak ticket sales, the NFL’s decision to split apparel rights will increase revenue. Reebok paid $300 million for its 10-year deal with the league, but some estimate that Nike will pay 1 billion for its on-field rights. Furthermore, fans will have a larger selection of merchandise and from different companies to choose from. Nike is the “just do it” company, what is Reebok? Nike is the gear of champions and the NFL wants its players and fans to feel that way.
http://online.wsj.com/article/SB10001424052748703440004575548144277455632.html?KEYWORDS=retail
When I read this, I was wondering how it was determined that Nike would have those rights. Is this because Reebok's contract was up, or because of something else? If other companies are also sharing apparel rights, what do they do? What other aspects are there other than on-field apparel, and how is this going to affect companies other than Nike and Reebok?
ReplyDeleteCatherine Reeves
I found your post very interesting as I would of never imagined Reebok would ever agree to split it's exclusivity with any other competitor.
ReplyDeleteThe NFL's decision to split the apparel contracts is so simple, yet extremely innovative. I'm sure that such competition will lead to fierce competition and I can't wait to witness the marketing war between the two giants.
Thank you for sharing!
Michael Milner