Under Armour Signs Deal to Supply MLB Uniforms
December 05 2016 - 11:00AM
Dow Jones News
Under Armour Inc. signed its first deal to supply uniforms for a
major professional sports league, inking a 10-year deal with Major
League Baseball that begins with the 2020 season.
Financial terms of the agreement weren't immediately available.
Under Armour will become the provider of on-field uniforms, base
layer and game day outerwear as well as training apparel for the
league's 30 clubs, according to the company.
Fanatics, a privately-held licensed sports gear manufacturer
that specializes in e-commerce, will manage the manufacturing and
distribution of jerseys and other apparel under the deal.
The deal with MLB comes as the market for sports endorsements
and partnerships has become more expensive and competitive. Nike
Inc. will take over outfitting rights to the National Basketball
Association beginning next season, an eight-year contract worth
more than $1 billion, according to a person familiar with the
matter. Adidas AG last year signed a deal with the National Hockey
League.
Baltimore-based Under Armour, which has had on-field success
with sponsoring individual athletes like the NFL's Cam Newton, the
NBA's Steph Curry and MLB's Bryce Harper, has been building its
sports portfolio with Division-I college deals like Notre Dame. It
also has some Olympic sports rights, including with U.S.
Speedskating and USA Gymnastics.
Some analysts have expressed concern that Under Armour, with
roughly $4 billion annual sales, may be spending too much of its
marketing budget on endorsements. In a research note published last
month, Stifel analyst Jim Duffy lowered the firm's target price for
the company's stock, writing that "endorsement obligations could
become a more consequential source of margin pressure."
Major League Baseball uniforms are currently supplied by
Majestic Athletic, a division of VF Corp. The company has said it
is exploring strategic alternatives for its Licensed Sports Group
Business, which includes Majestic.
Write to Sara Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
December 05, 2016 10:45 ET (15:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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