NFL to Split Apparel Licensing Between Companies Including Nike

The National Football League (NFL) is splitting the key part of its apparel licensing between two companies, including Nike Inc, in a move that analysts said would boost revenue.

The five-year, multimillion-dollar deals with those companies and five others will begin in April 2012, and analysts said they could be worth $1 billion to the U.S. sports league.

Under the new agreements, the NFL split the onfield apparel license among Nike and privately held New Era. SportsOneSource analyst Matt Powell called that license the “plum” of the group because it makes up more than half of the revenue.

“As you’re watching the game, you’ll see nothing but the Nike logo,” he said.

Adidas AG’s Reebok brand currently holds those licenses, which expire after the 2011-2012 season. Adidas and Under Armour Inc had bid for the Nike license.

Under Armour remains the sponsor of the league’s scouting combine and will also begin selling related apparel.

“The league is looking to grab as much money as it can from the licensees by splitting it,” Powell said. “They got more money than they would have from one guy.”

The NFL did not disclose the terms of the new agreements, approved by its 32 owners at a meeting in Chicago, but said they topped the value of the current deals.

Powell estimated the collective deals could be worth up to $1 billion for the NFL. While no estimate for the current deals is available, reports had Reebok alone paying $300 million over its 10-year agreement that it signed in 2001.

Revenue for NFL-licensed apparel at retail in the United States totaled about $1.9 billion in 2009, but had fallen at a mid-teen percentage rate so far this year, according to SportsOneSource.

Eric Grubman, executive vice president of NFL ventures and business operations, said: “The new framework will provide fans with a wider breadth of merchandise from global category leaders in the sports licensed apparel industry.”

Under the new deal, Nike gets the license for uniforms and gear worn by players and coaches on the sidelines, while New Era is the onfield hat supplier, the NFL said.

Nike Brand President Charlie Denson added: “Certainly, the NFL represents one of the premier sports franchises here in the USA. We believe the United States still represents a great growth opportunity for the Nike brand.”

Reebok said in a statement that it had enjoyed its long NFL deal, but would focus on its other sports partners, including the National Hockey League, National Basketball Association, Major League Baseball and Major League Soccer, as well as several colleges.