Under Armour, Fanatics reportedly score key MLB licensing deal

Dive Brief:

Sports apparel brands Fanatics and Under Armour have earned a licensing deal from Major League Baseball to produce Under Armour-branded on-field jerseys for the entire league beginning in 2020, Sports Business Daily reports.
Current licensees Majestic Athletic (whose agreement ends in 2019) and Nike likely will lose out to Fanatics, which would get broad apparel rights for the league, and Under Armour, whose brand would be featured on game jerseys, the report adds.
Neither MLB nor Fanatics has commented on the potential deal, but it is believed that it could be formally announced sometime after this season's World Series concludes, according to Sports Business Daily.

Dive Insight:

This appears to be feather in the cap of Fanatics efforts to achieve more visibility. The retailer has been an MLB business partner since 2003 and has licensing and e-commerce fulfillment arrangements with several major professional sports leagues, but often is still thought of (if customers think of it at all) primarily as a storefront, and not much else. That reputation is the opposite of Under Armour, which definitely has a high cool quotient as an apparel brand, though this would be the brand's first on-field appearance for a major American sports league.

This new deal would see Under Armour get the on-field laurels as the visible brand name on the jerseys, but it is still a big win for Fanatics, which apparently was the chief orchestrator of the agreement and reportedly convinced MLB to grant the company a very broad set of apparel rights as a manufacturer and retailer, a potentially highly lucrative vertical arrangement.

There seems to be a lot of speculation about where Fanatics goes from here. It could take that vertical arrangement model to other pro leagues as their apparel contracts come up for bid, and could change the game for professional sports licensing deals. Some also see an IPO in Fanatics' near future.

If it is true that the Majestic brand is disappearing from the ball field, it will be strange not seeing its familiar logo on MLB apparel. This reported change comes at a time when Majestic's corporate owner has the company and some of its other assets up for sale. Fanatics already has emphatically denied that it might buy Majestic to win this deal, although that certainly sounds like something it might have considered as it continues to demonstrate the ambition and aggressiveness required to take over the sports licensing world. In any case, Majestic is the old pro that gets another few years to play out its MLB career, while Fanatics is the young upstart, getting primed for its rookie debut.