• Forbes

Under Armour Inks First Pro Sports League Uniform Deal

Under Armour has signed its first-ever professional league uniform deal, locking in terms with Major League Baseball on a ten-year deal that will begin with the 2020 MLB season. It marks the beginning of a new era for Under Armour and the close of MLB's longstanding relationships with Nike NKE +3.31% and Majestic Athletic.

The high-level takeaway is that Under Armour believes it is able and ready to compete with more entrenched sports brands on league-wide partnerships. Under Armour has previously displayed its prowess in conducting diligence in signing up players prior to reaching their peaks and before they seek premiums on said endorsement deals. This MLB deal is a shift in strategy.

Under Armour's existing MLB relationships include endorsement contracts with Los Angeles Dodgers pitcher Clayton Kershaw, Washington Nationals outfielder Bryce Harper, Baltimore Orioles catcher Matt Wieters and San Francisco Giants catcher Buster Posey. These athletes, plus others sponsored by Under Armour, will undoubtedly be activated to a greater extent as 2020 approaches.

The reason for the delay of the effective date of Under Armour's deal is an existing relationship between MLB and Majestic Athletic, which will not expire until after the 2019 MLB season. Interestingly, rumors of a Majestic sale have circulated, with Under Armour and Fanatics discussed as potential buyers.

Fanatics is also part of MLB's new deal with Under Armour and will be granted what is being described as broad consumer product licensing rights to manage the manufacturing and distribution of Under Armour and Fanatics fan gear.

"This partnership epitomizes our next-generation model which brings much-needed agility to the industry, enhancing both assortment and speed-to-market of MLB merchandise for teams, fans and retailers." said Michael Rubin, executive chairman of Fanatics. "Both Fanatics and Under Armour get to do what each does best, while joining forces with an innovative and tech-savvy league to help grow the game of baseball through a pioneering new business model better suited to today’s digital economy."

Together, Under Armour and Fanatics foresee this long-lasting deal with MLB to create impressive growth for the companies.

"I have no doubt [Fanatics] will be the fastest growing large company in sports over the next 5 years," says ESPN's Darren Rovell.


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