Under Armour is ending its on-field licensing contract with the National Football League, the company said, in the US sportswear brand’s latest retreat from its marketing commitments and a move that reduces its presence in America’s most popular sport.
The decision will effectively restrict accessory products bearing the Under Armour logo from being worn or displayed on the field during games, limiting the endorsement impact for individual star athletes such as Tampa Bay Buccaneers quarterback Tom Brady.
It is the latest marketing retrenchment by Under Armour, which last year moved to cancel two outfitting contracts with the university sports programmes at the University of California, Los Angeles and the University of California, Berkeley, together worth more than $300m.
Sean Eggert, senior vice-president of global sports marketing at Under Armour, said in a statement to the Financial Times that “we are in active conversations with the NFL to determine alternative opportunities that best serve athletes moving forward and to ensure the best [return on investment] for Under Armour”.
A spokeswoman for the company declined to specify when the NFL contract would expire. A person familiar with the discussions between the league and the company said the contract would end this year and that football players with individual contracts with Under Armour were re-evaluating their marketing prospects for the new season beginning in autumn.
The NFL did not have an immediate comment. Representatives for Mr Brady did not respond to requests for comment.
The financial value of an on-field licensing agreement is estimated at between $10m and $15m per year, according to a person familiar with such contracts. According to its most recent annual filing, Under Armour had more than $679m in total sponsorship obligations at the end of 2019.
The on-field rights primarily affect accessory products, such as gloves, as well as apparel worn by athletes at the NFL Combine, a scouting event for new players.
The sportswear company is in the midst of a multiyear restructuring, which preceded the onset of the coronavirus pandemic, and its chief executive of just over one year, Patrik Frisk, has pledged a more disciplined approach for the Baltimore-based brand.
In October, Mr Frisk announced Under Armour was effectively winding down its connected fitness business, a category that founder and former chief executive Kevin Plank pledged almost $1bn towards in an effort to more effectively sell products directly to consumers.
Last year, Nike took over the rights to supply Major League Baseball uniforms after Under Armour retreated from a commitment made in 2016 to do so. Nike is the official uniform supplier to three of the top four American professional sports leagues — the NFL, MLB and the National Basketball Association — while Adidas supplies the National Hockey League.