The National Football League has announced a new sports apparel rights deal and like most things associated with the NFL, it's big news. Staring in April 2012, current exclusive rights holder Reebok is out, punted away in favor of a better deal from rival Nike.
NFL owners, meeting in Chicago, voted Tuesday to award the Swoosh a five-year contract to produce on-field team uniforms, sideline personnel apparel and fan gear. Numbers aren't circulating, but in 2001, Reebok agreed to pay $300 million over ten years and, according to a Citigroup analyst, generates about $350 million in annual revenue for the company. I'm not very good with business math but that appears to be an 1166% return on investment. The marketing power of the NFL.
Think about it. The NFL makes the major networks sweat bullets when it comes time to renew television rights. And, the NFL is the most valuable exclusive offering DirecTV has for customers. Of all the professional sports subscription packages, NFL Sunday Ticket is the only one that can only be purchased through the satellite service provider. DirecTV paid $700 million a year to maintain the exclusive contract through the 2014-15 season. The marketing power of the NFL. Kind of makes you wonder why Reebok let their deal slip away.
