Here’s Why the MLB Deal is Huge For Under Armour
It officially kicks off in 2020.
Under Armour has confirmed a 10-year uniform partnership with Major League Baseball, the Baltimore-based athletic gear company’s first-ever deal with a major U.S. professional sports league.
The deal, which will begin in the 2020 MLB season, gives Under Armour UA 2.46% exclusive rights for a 10-year period to provide MLB teams with all their on-field uniforms, including jerseys that will feature the company’s branding, as well as base layer and game-day outerwear gear, and training apparel for all 30 teams that play in the league.
The deal, which will begin in the 2020 MLB season, gives Under Armour UA 2.46% exclusive rights for a 10-year period to provide all 30 MLB teams with all their on-field uniforms, including jerseys that will feature the company’s branding, as well as base layers, game-day outerwear gear, and training apparel.
Meanwhile, licensed sports merchandiser Fanatics has been granted broad consumer product licensing rights to manage and manufacture the Under Armour-Fanatics fan gear. Both are planning to offer some apparel and accessory items to fans before the 2020 season.
Terms of the transaction weren’t disclosed.
Under Armour CEO Kevin Plank on Monday called the deal a “watershed moment for the Under Armour brand.” Baseball Commissioner Robert D. Manfred Jr. said the company was an ideal fit to “showcase our players and provide an even stronger connection between our game and its young fans and players.”
The deal is significant in that it implies that Under Armour—the 20-year-old upstart that has reported consistent double-digit sales growth—is playing in the big leagues with the likes of Nike NKE 2.56% and German-based Adidas. For Under Armour, the deal will help bolster the company’s apparel business, which has remained the core base of sales even as demand for Under Armour footwear has been accelerating faster. In the first nine months of 2016, Under Armour generated $2.3 billion in revenue from apparel vs. $786 million for footwear.
The long-rumored deal is also the fourth shakeup for a U.S. major league since 2012. Nike won the NFL’s business from Reebok back in 2012 and three years later officially announced it would take over the NBA deal from Adidas starting in the 2017 season. Reebok, which had also outfitted the NHL, last year said it would pass that contract along to sibling brand Adidas. Under Armour took over the MLB deal from Majestic.
These changing partnerships come at a time when bidding for the privilege of outfitting pro and collegiate athletes has become highly competitive and thus, expensive for the victors. But with millions of fans watching these games at home and in stadiums, it’s important for companies like Under Armour to get the attention that comes from consumers seeing the brands in action on the field.
Under Armour has had success signing deals with high-profile individual athletes, including the NBA’s Stephen Curry, MLB star Bryce Harper, and golf pro Jordan Spieth. The company has also aggressively won over key collegiate deals in recent months.
Though Under Armour and the MLB have worked together as far back as 2000, when Under Armour became the league’s base layer supplier, the expanded partnership will help the brand bolster its clout with fans of the popular American pastime. The deal also comes after the MLB ended its latest season with sky high ratings as the nation tuned in to watch the Chicago Cubs score a historic victory. One note of caution: Youth participation in baseball is down sharply and that could dampen interest in the pro sport in later years.