Under Armour Inks Deal to Place Logo on Front of MLB Jerseys
(Bloomberg) -- Under Armour Inc. struck another blow in the fight for exposure by inking a sponsorship deal with Major League Baseball that will put its logo on the chest of every jersey.
The 10-year partnership, in which Under Armour will provide on-field uniforms and training gear for MLB players, will begin no later than the 2020 season, according to the league. Closely held Fanatics Inc. will manufacture licensed products -- including hats, jackets and T-shirts -- sold to fans at retailers like Dick’s Sporting Goods Inc. or online. Under Armour will aid in the design of these items. While terms of the deal weren’t disclosed, Under Armour will share in the revenue stream coming from fans.
The agreement comes at a time when demand for sponsors for teams, leagues and players is surging, with Under Armour and a rebounding Adidas AG spending more to challenge Nike Inc., the world’s largest sports brand. Under Armour recently signed a partnership with the University of California at Los Angeles, while Nike took the National Basketball Association sponsorship from Adidas and signed Ohio State University.
“It’s a massive brand lift,” Under Armour Chief Executive Officer Kevin Plank said in an interview. “It’s a ton of exposure.”
Seeking Younger Fans
While MLB’s television viewers are, on average, older than those of other U.S. professional sports leagues, it has attracted younger fans on mobile devices. The average age of a user on its popular At Bat mobile application is 31, according to the league. Total time using the app rose 33 percent to 10.4 billion minutes last season. At Bat offers video and audio feeds of games, plus highlights and stats.
The agreement will put a logo on the front of MLB jerseys for the first time -- on the right side of the chest, just above the team name. Majestic Athletic currently has the main MLB uniform license, while Nike had a deal for base-layer apparel. Under Armour will be taking over both. While Under Armour can increase revenue from its baseball business, Plank sees being associated with America’s pastime as the larger opportunity.
“Think of a Yankees fan who is standing in front of a shoe wall deciding what they want to buy,” said Plank, who’s also the founder of Under Armour. “They will think about the fact that there is an Under Armour logo on the front of their jersey.”
When Majestic, which is owned by VF Corp., decided to end its partnership, the league looked for ways to make the deal more valuable, and one big change is moving the logo to the front of the jersey, according to MLB Commissioner Rob Manfred. That helped MLB more than double what it will earn annually from the license, he said. Choosing Under Armour also will help MLB attract younger fans, a big objective for a league that has an older fan base, because the brand already has a strong connection to that generation, he said.
“A young brand was really important to us,” Manfred said. “Under Armour is also at the cutting edge of performance.”
The combination of Under Armour and Fanatics is unique in licensing deals, according to Fanatics Executive Chairman Michael Rubin. Usually a sports brand gets a deal by itself and thus is more focused on performance than the licensing side, he said. Fanatics, which has more than $1 billion in annual sales, only makes licensed goods and already runs the online stores for the four major U.S. sports leagues, including MLB.
Under Armour and Fanatics “were the kind of partners that were going to help us drive our business forward,” Manfred said.