Under Armour (NYSE: UA) is about to step up to the plate with a new high-profile deal. In conjunction with privately held Fanatics, the company has scored a long-term contract with Major League Baseball to be the exclusive provider of on-field uniforms and accessory clothing for all 30 teams. Fanatics will hold a license to manufacture and distribute MLB fan gear to consumers; these products will be sold under both the Under Armour and Fanatics brand names.
The term of the arrangement is 10 years, and it kicks off in the 2020 MLB season. Financial details were not disclosed.
“Positioning a historic sport institution and its constant drive to expand fans’ access points to the game through technology innovation, alongside a young, fearless and driven sports brand and best-in-class licensing experts, provides enormous opportunity to grow every level of the game through this strategic partnership,” Under Armour said in its press release trumpeting the deal.
Under Armour’s win is a loss for VF Corp. (NYSE: VFC), which has been supplying the MLB’s uniforms since 2004 through its Licensed Sports Group division — specifically its Majestic Athletic brand. Though the usurpation of the baseball business will hurt, the Licensed Sports Group’s client list still includes a raft of professional leagues such as the NHL and the NFL, in addition to non-sports entities like Harley-Davidson.
Although the new MLB deal will almost certainly be a plus for Under Armour, the company’s stock price rose only incrementally after it was announced. The good news wasn’t enough, apparently, to overcome recent investor concerns about a potential slowdown in growth, and the high cost of its endorsement deals with athletes such as Steph Curry, Tom Brady, and Clayton Kershaw.
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