Fanatics, Under Armour Team For MLB's On-Field Jerseys Beginning With '20 Season

In what would mark a significant shake up in MLB’s licensing business, Fanatics and Under Armour have quietly completed a deal that will see them team to produce UA-branded on-field jerseys starting with the '20 season. The deal would mean the end of MLB’s longtime licensing relationship with both Nike and Majestic Athletic. Starting in the spring of '20, all jerseys would feature UA branding, while Fanatics will gain broad apparel rights across MLB, with an exception being headwear that will remain with New Era. Fanatics getting such all-encompassing rights suggests a new model for sports licensing in the U.S., one other properties will surely scrutinize. Industry sources said MLB President of Business & Media Bob Bowman recently presented the new apparel deal to MLB ownership, which approved it during a conference call last week.

WHAT IT MEANS: VF’s Majestic Athletic has held exclusive jersey rights since the '05 season, but its current deal ends after the '19 season. VF put its Licensed Sports Group, which includes Majestic, up for sale in March. Meanwhile, the Nike swoosh has been on the under-layer and neckline of most baseball players since '09. But as currently envisioned, the two longtime business partners will be without MLB licenses following the '19 season. While a Fanatics spokesperson would not comment on the deal, he said flatly, “We are not buying Majestic.’’ Spokespeople for both MLB and UA offered no comment. An official announcement of the rights deal, which will mark UA's first uniform deal among the major American pro sports leagues, is expected after the World Series.

FANATICS' BOLD MOVE: Details of the deal are scarce, though sources said the deal was largely orchestrated by Fanatics and that MLB felt UA was a more suitable on-field brand. Garnering MLB on-field rights is the most aggressive move yet by Fanatics offering a vertical arrangement, combining manufacturing and retailing. As it has amassed licensing and venue retail rights in an unprecedented fashion, Fanatics’ end game has been the subject of intense industry-wide speculation. Sources said that as Fanatics aims toward a likely IPO in '18, it is targeting additional major sports licensing rights deals. Both a new USTA/U.S. Open merchandise deal and a five-year Super Bowl deal are expected to be awarded this year. Fanatics has been an MLB business partner since '03 and has long provided e-commerce fulfillment for most major U.S. sports properties, including the NFL, NBA, NHL, NASCAR, PGA Tour and hundreds of team sites. While Fanatics made its name in e-commerce, it now must prove that it can meet the considerable retail delivery and team service requirements demanded by a sport that has games virtually daily over a six-month season. The deal continues a flurry of on-field apparel rights activity impacting U.S. leagues over the past 18 months. In that time, the NBA has transferred on-court rights from adidas to Nike, while the NHL switched its long time Reebok sweater rights to adidas, which owns Reebok. As jersey deals came due, Fanatics was pitching similar vertical models. Fanatics inked a massive 17-year extension of its off-field MLB deal last year, and this new arrangement gives it greater influence over MLB than any licensee.

UA'S CREDIBILITY: Being on-field with MLB will give UA increased visibility and associated credibility. It has held limited MLB footwear rights since '11 and Gear for Sports has produced a UA-branded MLB fanwear line with limited distribution for the past few years. The brand’s stable of MLB endorsers includes big names like Dodgers P Clayton Kershaw, Nationals RF Bryce Harper and Giants C Buster Posey. “Under Armour considers baseball a very strategic category for its future and it gives them a great public face in the summer to complement their fall and winter team sports,’’ said former MLB Properties President and Nike exec Rick White, now president of the Atlantic League, and a licensing consultant. “I’ll also be interested to see what Fanatics (e-commerce) distribution can do for Under Armour’s licensed and non-licensed apparel."

WHAT’S NEXT: With a new uniform deal complete, baseball ownership has now directed Bowman and the league to conduct a review of its licensed youth business and put that out to bid later this year.