Under Armour Signs Deal to Supply MLB Uniforms

Under Armour Inc. signed its first deal to supply uniforms for a major professional sports league, inking a 10-year deal with Major League Baseball that begins with the 2020 season.

Financial terms of the agreement weren't immediately available. Under Armour will become the provider of on-field uniforms, base layer and game day outerwear as well as training apparel for the league's 30 clubs, according to the company.

Fanatics, a privately-held licensed sports gear manufacturer that specializes in e-commerce, will manage the manufacturing and distribution of jerseys and other apparel under the deal.

The deal with MLB comes as the market for sports endorsements and partnerships has become more expensive and competitive. Nike Inc. will take over outfitting rights to the National Basketball Association beginning next season, an eight-year contract worth more than $1 billion, according to a person familiar with the matter. Adidas AG last year signed a deal with the National Hockey League.

Baltimore-based Under Armour, which has had on-field success with sponsoring individual athletes like the NFL's Cam Newton, the NBA's Steph Curry and MLB's Bryce Harper, has been building its sports portfolio with Division-I college deals like Notre Dame. It also has some Olympic sports rights, including with U.S. Speedskating and USA Gymnastics.

Some analysts have expressed concern that Under Armour, with roughly $4 billion annual sales, may be spending too much of its marketing budget on endorsements. In a research note published last month, Stifel analyst Jim Duffy lowered the firm's target price for the company's stock, writing that "endorsement obligations could become a more consequential source of margin pressure."

Major League Baseball uniforms are currently supplied by Majestic Athletic, a division of VF Corp. The company has said it is exploring strategic alternatives for its Licensed Sports Group Business, which includes Majestic.

Write to Sara Germano at sara.germano@wsj.com

(END) Dow Jones Newswires

December 05, 2016 10:45 ET (15:45 GMT)

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