Thursday, December 1, 2022

Under Armor terminates NFL licensing deal ahead of Super Bowl

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Under Armor is ending its field licensing deal with the National Football League, the company said in the last withdrawal of the American sportswear brand from its marketing commitments and a move that reduces its presence in the sport most popular in the United States.

The ruling will effectively prevent accessory products bearing the Under Armor logo from being worn or displayed on the field during games. This will limit the impact of the approval for individual star athletes such as quarterback Tom Brady, who is preparing to lead the Tampa Bay Buccaneers against the Kansas City Chiefs in Sunday’s Super Bowl, the biggest event. televised annually in the United States.

This is the latest reduction in marketing by Under Armor, which last year went to cancel two outfitting contracts with the University of California Los Angeles and University of California Berkeley varsity athletic programs, totaling more than $ 300 million.

Sean Eggert, senior vice president of global sports marketing at Under Armor, said in a statement to the Financial Times that “We are in active conversation with the NFL to determine the alternative opportunities that will best serve athletes in the future and for the better. ensure the best [return on investment] for Under Armor ”.

A company spokeswoman declined to say when the NFL contract expires. A person familiar with the league’s discussions with the company said the contract will expire this year and football players with individual contracts with Under Armor are reassessing their marketing outlook for the new season starting in the fall.

The NFL did not have an immediate comment. Representatives for Mr. Brady did not respond to requests for comment.

The financial value of a field license agreement is estimated to be between $ 10 million and $ 15 million per year, according to a person familiar with these contracts. According to its latest annual filing, Under Armor had over $ 679 million in total sponsorship obligations at the end of 2019.

Field rights primarily affect accessory products, such as gloves, as well as clothing worn by athletes at the NFL Combine, a screening event for new players.

The sportswear company is in the midst of a multi-year restructuring, which preceded the onset of the coronavirus pandemic, and its chief executive just over a year, Patrik Frisk, promised a more disciplined approach for the Baltimore-based brand.

In October, Mr. Frisk announced that Under Armor was indeed relax its connected fitness business, a category in which founder and former CEO Kevin Plank has pledged nearly $ 1 billion in an effort to more effectively sell products directly to consumers.

Last year, Nike took over the rights to supply Major League Baseball uniforms after Under Armor withdrew from a 2016 commitment to do so. Nike is the official uniform supplier for three of America’s four largest professional sports leagues – the NFL, MLB and the National Basketball Association – while Adidas supplies the National Hockey League.

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