The NFL has agreed to replace Reebok as its sportswear provider with the powerhouse known as Nike. This move is predicted to increase sales dramatically. Reebok had held the NFL Apparel License since 2001 and Nike will take over in 2012. Their contract will last 5 seasons. Nike’s sales have been slower since the financial crisis but they hope that the deal with the NFL will boost sales once again for Nike. I think this is a great deal for Nike. The NFL is a huge organization that is followed by so many people. Also, Nike owns New Era Cap Co. which is famous for their quality and featuring sports teams on their caps. With the addition of the NFL logos on New Era caps, sales will surely grow because of New Era’s popularity. I think Nike just put another crown on its head.
In class, we went over the concept of buyer power and brand positioning. In this case, Nike seems to have bought out Reebok’s contract with the NFL. They would not have been able to do this if they did not have buyer power. The NFL may have been submissive to Nike’s offer because Nike is just the most well-known sports apparel company in the world….
SOURCE: BUSINESSWEEK