Fanatics, Under Armour awarded 10-year MLB licensing deal

Dive Brief:

Under Armour and Fanatics have won a much-anticipated 10-year contract from Major League Baseball.
Fanatics will make and sell licensed jerseys and other apparel to consumers, while Under Armour manufactures and brands the uniforms that all MLB players will wear on the field.
The deal commences in 2020, and Under Armour will replace current uniform manufacturer Majestic. However, Fanatics — which will replace Majestic and Nike to some degree in sales of MLB-licensed fan apparel — will earn the majority of the revenue to be made under the contract.

Dive Insight:

The MLB deal comes as both Fanatics and Under Armour have been more aggressively pursuing relationships with pro sports leagues: Under Armour has been a partner of MLB since 2000, as its official baselayer supplier. The arrangement was rumored back in October to be a nearly done deal, and the speculation was pretty much right on, even though it took a bit longer to be announced than anyone expected.

A lot of the coverage of this deal is leading with the significance of Under Armour's highly visible, on-field portion of the contract, at a time when the company's overall financial performance has been a bit weak. It is significant brand exposure for Under Armour, although the company already has become known for its excessive marketing spending and the ubiquity of its logo. Visitors to Wrigley Field, home of the 2016 World Champion Chicago Cubs (will never get tired of saying that), can tell you all about the giant Under Armour logo on the left field wall amid the ivy.

However, while Under Armour gets the on-field glory and the opportunity for its threads to adorn young superstars like Bryce Harper and Kris Bryant, Fanatics may be the bigger winner in this deal. It stands to make more of the revenue over the life of the contract, and together with Fanatics' recent major expansion of its existing deal with the National Hockey League, it demonstrates how the retailer/supplier is becoming a huge force in athletic apparel.

The timing of this deal also may prove significant to both companies, as baseball appears to be well into an economic renaissance and renewal of popularity, while pro football's place in popular culture appears to be slipping a bit. There may be no better time than the coming years for retailers and product brands to be associated with MLB. The only bad thing about this deal is that Fanatics, Under Armour, MLB players and fans wanting to get their hands on the new gear need to wait a few more years before th relationship formally begins. Oh, well, some things are worth waiting for — just ask Cubs fans.