IBJNews

Reebok's loss of NFL contract could hurt local plant

Back to TopCommentsE-mailPrint

The National Football League's decision to replace Reebok with Nike Inc. in a new apparel licensing deal could be bad news for a local plant that employs about 1,000 people.

Nike Inc., the world’s largest sporting-goods maker, won the license to make NFL-branded apparel and uniforms, replacing Reebok, the league announced Tuesday.

NFL owners approved a licensing deal with Nike that will begin in 2012, the league said in an e-mailed statement. Reebok, which was acquired by Adidas AG in 2006, has held the license since 2001.

Adidas AG’s Reebok U.S. sports licensing division is headquartered on the east side of Indianapolis just west of the intersection of 25th Street and Post Road. The facility manufactures, designs and distributes apparel for the NFL, National Basketball Association, National Hockey League, Major League Baseball and the NCAA.

A plant manager could not be reached for comment late Tuesday morning.

John Horan, publisher of trade publication Sporting Goods Intelligence, said layoffs are a strong possibility.

“The NFL business, I’m sure, is a huge percentage of what the [plant does], so it’s a big deal,” he said. “I assume they’re going to have to make some adjustments. Nike certainly isn’t going to use the facility.”

Reebok’s NFL license represents $350 million of its $565 million in U.S. apparel revenue, Kate McShane, an analyst at Citigroup Inc. in New York, wrote in a report to investors Monday. The license may boost Nike’s earnings per share as much as 3 percent in 2012, said McShane, who is based in New York and has a “buy” rating on the shares.

Nike had the resources and is willing to pay for it, Chris Svezia, an analyst for Susquehanna Financial Group in New York, said in an interview. “Is it game-changing for them? No. $300 million to $500 million is 2 percent to 3 percent of global revenue. That’s small.” Svezia has a “neutral” rating on the shares.

Adidas spokeswoman Katja Schreiber declined to comment to Bloomberg on the report and wouldn’t give an estimate of NFL-related sales.

Adidas, which bought Reebok in 2006, wants to make the unit more profitable by repositioning it as a fitness-apparel and shoe specialist.

“If we lose the NFL, it won’t make or break our company,” Adidas CEO Herbert Hainer told CNBC on Sept. 29.
 


ADVERTISEMENT
  • Huh?
    What's "loose"?
  • Huh?
    What's "loose"?
  • Huh?
    What's "loose"?
  • Jim, jim, jim
    I do have a problem with your comment. Do you not think that Reebok did the same thing to some company back in 2001 when they got the NFL contract and that company had to layoff workers. But I am sure that didn't matter then because the business came to Indy and hired people from Indy. So back then the free market was fine as long as it benefited Indy and not another town. I am sure you weren't writing letters back then stating that the free market is terrible and this shouldn't happen to those people who lost their jobs because Reebok Indy was creating jobs. The free market has developed these situations for years and our economy has yet to collapse.
  • How did the Colts vote?
    I wonder how the Colts voted on this lic deal.
  • Free Market at its Best
    I am sure that these shirts will be made overseas in a sweatshop. But that is business, the more jobs we loose overseas is all part of Capitalism. Besides, I am sure all those jobs that will be lost will finally put lazy bums on notice to work for less money, less benefits, and longer hours. Hurray for Free Market Trade. Also lets make sure that those who loose their jobs will get NO UNEMPLOYMENT, NO MONEY FOR JOB TRAINING. After all, we don't have the money to do that, and it is not our fault they lost their jobs.
  • Sorry to hear this. Bad for the City and for the employees. And what will the local reporters do Superbowl Sunday night if they cannot shoot live at them making shirts for the umpteenth year in a row?

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. City-County Councilor Angela Mansfield and Bob Lutz have a case of wishful thinking.

    They obviously don't really care about the cost.

    They should.

    Extending Federal Benefits to Same-Sex Couples Will Cost $898M, CBO Says

    http://www.foxnews.com/politics/2009/12/22/extending-federal-benefits-sex-couples-cost-m-cbo-says/

  2. Brett, be careful what you lie about, the truth always comes out.

    "IMS's George Honored: Tony George, Indianapolis Motor Speedway president and chief executive officer, received the inaugural Pioneering and Innovation Award at the Autosport Awards Dec. 5 in London for his leadership in the development of the Steel and Foam Energy Reduction (SAFER) Barrier. George received the award at the annual gala at the Grosvenor House on behalf of the creators of the SAFER Barrier from Prince Salman Bin Hamad Al Khalifa, the leader of the Bahrain International Grand Prix circuit. This is the fourth major award that has been presented to honor George and the SAFER Barrier development team. The SAFER Barrier also received the Louis Schwitzer Award, SEMA Motorsports Engineering Award and GM Racing Pioneer Award in 2002. The SAFER Barrier was installed in all four turns of the Indianapolis Motor Speedway a pioneer in safety for drivers, cars and tracks -- in time for the 86th Indianapolis 500 in 2002. It since has been installed at more than a dozen other tracks, and the latest iteration will be installed at the Speedway in the spring.(IMS PR), see more on my Indy Track News page.(12-7-2004)"

    As far as the cart safety team, I cannot find anything on its date of creation. The Delphi Safety team was created in 1996. For some reason there is not much info out there on defunct racing series.

  3. Great article Anthony. Glad IMS is finally being run like a business and not a personal check book to finance the "Vision".

    Things are looking up but 15 years of scorched earth won't be fixed overnight. Unfortunately the TV ratings are still poor and that won't change anytime soon with the brilliant 10 year contract signed under the former regime.

  4. Brett not sure why you wonder what he said in his quote. "''I would like to jump in a time machine, go back to 1995, and tell the owners and Tony George not to split,'' Franchitti said. ''As soon as my time machine is done, I know where I'm going.''"

    Pretty clear, he would love to go back and tell TG and the team owners not to split.

    I am not sure there is anyone who wanted the split, and I don't think there is anyone who would not like to go back and prevent the split. But, as has been discussed ad nauseum, without the split carts management by team owners would have run all of ow racing into bankruptcy. If cart had such a wonderful product, then losing IMS would not have forced it into bankruptcy. If NASCAR lost Daytona or Charlotte, it would not fail like cart did.

    Truth,

    So you predicted that cart would go into bankruptcy and cease to exist while Indycar would continue on? I missed that prediction.

  5. I want to live in a city that has a garage structure to be proud of for it's innovating design!

ADVERTISEMENT