Iconic sports apparel maker Nike and rising sportswear manufacturer Fanatics are enrolling in college together. Sort of.
On Wednesday, the two companies announced a long-term deal that will see Fanatics produce Nike-branded replica jerseys, shorts, and other consumer gear for NCAA programs, allowing Nike to focus on developing finely tuned products for athletes. Similar partnerships in pro sports have already netted the two high grades.
Case in Punt
Fanatics, valued at $27 billion last year, has been slowly staking out a position in college sports since 2017. That’s when it bought collegiate licensing company Fermata Partners, which was followed by 10-year licensing deals with high-profile NCAA schools including Texas, Oregon, and Oklahoma. Earlier this year, Fanatics began marketing college athlete jerseys with OneTeam Partners, and also signed hundreds of licensing deals to launch a collegiate trading card line.
Nike, meanwhile, is a collegiate holy grail. Seventeen of the top 20 schools in last season’s final AP college football poll were Nike schools. So were three of the men’s Final Four teams. By joining with Fanatics on the NCAA front, the Oregon-based company is rolling out an old play on new turf:
- Nike currently manufactures most of its collegiate merchandise in-house. Under the new agreement, Fanatics will inherit the manufacturing costs and revenue of consumer and fan products, paying royalties to Nike — in exchange Nike gets to focus on marketing its brand and developing on-field products, which entails a lot more sports science than a Longhorns t-shirt.
- Fanatics (which also dabbles in sports-themed auto and home products and is branching into sports betting) already has similar arrangements with Nike for the MLB and NFL teams that use its gear, and adding college products means a significant chunk of commercial Nike goods will be produced under one roof.
Wagon Hitched: Nike reported a record $44.5 billion in revenue last year, an 18% increase. As the exclusive fan apparel licensee for Nike’s pro sports and collegiate teams, Fanatics has made itself critical to the business of a sports giant and the multibillion-dollar world of NCAA athletic departments. That’s a home run, touchdown, and buzzer beater wrapped in one.