Many eyebrows were raised two weeks ago when Under Armour, the upstart sports clothing brand announced a ten year deal to become the exclusive and official uniform provider to America’s Major League Baseball (MLB) from 2020 onwards. For a brand celebrating just its 20th anniversary this year, it says much of how far the firm has grown in such a short period, to win the trust of MLB and also, more importantly, consumers’ trust.
Moving beyond the initial surprise of the deal, it is quite a unique partnership. As reported in the Wall Street Journal, it is unlike a traditional apparel agreement, whereby sportswear manufacturers control both licensing and manufacturing of the clothing. Instead, this deal will see Under Armour split the 10-year MLB deal with Fanatics, who power a variety of leagues’ eCommerce offerings, while also being an online apparel retailer itself.
What this really means is that Under Armour will design and manufacture the jerseys and apparel worn of MLB teams, while Fanatics will actually sell these products to consumers and will actually receive the majority of revenue generated.
This model of shared risk, and of course rewards, is an interesting approach by Under Armour and may actually become a test case for other challenger brands trying to land such huge deals. Working very much in Under Armour and Fanatics favour is the fact that the deal won’t start until the 2020 season, giving both parties enough time to make the most of the partnership.
Overall, this landmark and unique deal follows the wider pattern of most major US sports leagues changing apparel providers both in previous years and in future. Nike will take over rights to the National Basketball Association (NBA) beginning next season, while Adidas taking over from its subsidiary Reebok, will provide uniforms to the National Hockey League (NHL).
The deal and how it develops will be something I’ll be paying close attention to and Under Armour will also be a company I’ll delve into a bit deeper in coming weeks due to their great brand story (did you know its first big break came in 1999 thanks to Oliver Stone’s seminal “Any Given Sunday”?) and constant headline-grabbing innovation.