Monday, August 4, 2003 Updated: August 6, 3:53 PM ET
Seven licensees will pay the bulk of the fees
By Darren Rovell ESPN.com
Major League Baseball officials announced on Monday that the league and its 30 teams will be guaranteed at least $500 million from 2005-2009, thanks to signing new contracts with its licensing partners.
Commissioner Bud Selig called the agreement "a manifestation as to how strong this sport really is."
The guaranteed licensing money will be at least 70 percent more than MLB's current deal, said Tim Brosnan, baseball's executive vice president for business.
"We said we needed to grow the game," said Selig, who noted that MLB has grown licensing revenues each year since 1998. "We needed to put this game on a much more solid economic footing. I think a day like this makes a major contribution to all that."
The money will come from sales and royalties generated primarily from seven partners including Majestic, Nike, New Era, Drew Pearson International, VF Imagewear, Twins Enterprises and Dynasty Apparel.
Majestic will be the exclusive on-field licensee of outerwear, including game and batting practice jerseys, while New Era will remain MLB's official cap.
In 2005, Nike will take over for Under Armour as MLB's official performance supplier, as the "Dri-Fit" category is experiencing unprecedented growth. Howard Smith, MLB's senior vice president of licensing said the bidding for this segment of the business was "extremely aggressive."
"More than 55% of MLB players already compete in our footwear through individual partnerships, and the number of players using our equipment, including fielding gloves and catcher's gear, is steadily rising," said Adam Helfant, Nike's vice president of U.S. sports marketing. "This new agreement greatly expands an already substantial licensing business for Nike and significantly strengthens our overall baseball business."
VF Imagewear will be the exclusive supplier of championship T-shirts, Twins Enterprises will make non-authentic headwear to sell in the United States, and Drew Pearson will make non-authentic headwear for the international marketplace. Dynasty Apparel will make non-authentic jerseys to be sold at retail in the U.S. and abroad.
"These contracts are unprecedented in their size and scope," Brosnan said.
The major sports leagues have been paring down their licensees recently and offering more exclusivity. Reebok has 10-year on-field apparel deals with both the National Football League and the National Basketball Association.
Major League Baseball licensed products usually gross about $2.3 billion at retail, which is comparable to this past year's NBA business. The NFL is the fourth largest licensed brand in the world according to License! magazine. The league does more than $3 billion in retail sales each season.
Darren Rovell, who covers sports business for ESPN.com, can be reached at Darren.Rovell@espn3.com