Sports Business

Reebok takes heat over flap about apparel: Suit and tie excluded from NFL clothing contract

May 30, 2005

When new San Francisco 49ers coach Mike Nolan was told he couldn't wear a suit and tie on the sidelines because of apparel manufacturer Reebok's contract with the National Football League, some said Tom Landry and George Halas rolled over in their graves.

To be sure, the late NFL coaches known for their suits and ties wouldn't appreciate the mandate from Reebok, which manufactures much of its licensed goods on Indianapolis' east side and has suffered a public relations black eye since the controversy erupted this month.

"The first thing you heard was that Mike Nolan wanted to do this to honor his father," said Paul Swangard, managing director of the University of Oregon Warsaw Sports Marketing Center.

The final chapter of this strange saga is not yet written.

"This will be talked about endlessly through the preseason and the start of the season, and probably every time the 49ers play this year," said David Moroknek, president of Maingate Inc., a locally based dealer of licensed goods for the National Hot Rod Association, Indy Racing League, Harley-Davidson and a slew of other entities. "Never has so much attention been focused on what a single coach is wearing."

The flap became public in May after Nolan petitioned the NFL to wear a suit and tie on the sidelines, like his dad, Dick Nolan, did when he coached the 49ers from 1968 to 1975.

But long gone are the days of Landry's fedora. Today's NFL is better known for exclusive, big-money licensing deals.

"Reebok is one of three companies in the entire world that is allowed an official presence on NFL sidelines along with Motorola and Gatorade," Swangard said. "I don't have to tell you what that's worth, and they feel they need to protect that investment."

Reebok began supplying all NFL players, coaches, trainers and other sideline personnel with apparel in 2002 as part of an exclusive 10-year deal worth a reported $250 million. The contract stipulates a coach must be adorned in Reebok tops while prowling the sidelines. If a hat or visor is worn, it, too, must be Reebok brand.

"[Indianapolis Colts coach] Tony Dungy and [New England Patriots coach] Bill Belichick are our runway models," said Eddie White, Reebok vice president of team operations. "The whole program was designed around the sideline exposure."

Nolan broached the subject with Reebok officials during the NFL Combine in Indianapolis in February, White said.

Minnesota Vikings coach Mike Tice and New York Jets coach Herman Edwards also inquired about wearing more formal attire on the sidelines, White said. But it didn't blow up in Reebok's face until USA Today got ahold of the Nolan story.

"I've talked to reporters from Boston to L.A. trying to explain this," White said from his Indianapolis office.

Michael Wilbon, sports columnist for The Washington Post , said on his nationally telecast ESPN show, "Pardon the Interruption," that the NFL and Reebok showed no class in denying Nolan's request.

Those in the business are more forgiving. "Reebok is in the game to be serious about it, and people have to realize money from these deals is what supports this league," said Milton Thompson, president of Grand Slam Cos., a locally based sports marketing consultancy that formerly held licensing deals with the NFL.

Robert McGee, editor of Sporting Goods Intelligence, a nationally distributed trade publication based in Pennsylvania, said the NFL can be a gold mine for companies like Reebok.

"Reebok has seen its apparel sales climb in recent years at a double-digit percentage rate, and you have to believe this deal is a big part of that," McGee said. "Apparel represents $563.5 million in annual sales for Reebok."

Reebok's revenue for 2004 was $3.8 billion, and a report prepared by D.A. Davidson & Co., a Portland, Ore.-based brokerage firm covering Reebok, said apparel sales for the company have steadily increased in recent years to around 15 percent.

Much of the apparel is made in Indianapolis, White said. Canton, Mass.-based Reebok bought the former LogoAthletic out of bankruptcy in 2001. It has since increased the work force of the Post Road facility from 400 to more than 1,000, while signing exclusive licensing deals with the NFL and National Basketball Association.
Source: XMLAr00500.xml
ADVERTISEMENT

Recent Articles by Anthony Schoettle

Comments powered by Disqus