Nike And Fanatics Team Up To Outperform Under Armour, Champion In College Apparel Sector

Nike, Inc NKE announced on July 13 that it is making a strategic shift in how it manufactures NCAA clothing in a new deal with Fanatics.

What Happened: Nike and Fanatics entered into a long-term partnership in which the two will work together to manufacture college fan apparel. Fanatics already has licensing agreements with many of the universities and colleges Nike works with, but this deal will expand those agreements. 

Fanatics CEO Doug Mack told CNBC that the company is “excited to maximize the value of Nike’s college partnerships.” 

Nike shared in a statement that it is making a strategic shift in how it serves NCAA partners by extending licensing agreements with Fanatics and Brand Custom Sportswear, another collegiate apparel manufacturer. 

The partnership mainly gives Fanatics the ability to produce apparel for Nike-sponsored universities and colleges. It mainly impacts Penn State, Ohio State University, University of Georgia, Clemson University, University of Oregon, and the University of Oklahoma. 

The partnership is set to begin during the summer of 2024. 

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Why It’s Important: This new agreement will increase revenue and sector control for both Nike and Fanatics. The new partnership will allow Nike to increase listing agreements and therefore produce more clothing. 

Fanatics has a private valuation of $27 Billion and as revenue comes in from the partnership that number is likely to increase.

Following the announcement, Nike's stock was up 1.75% to $105.11 on Wednesday, according to Benzinga Pro. 

Photo:Courtesy of Open Grid Scheduler / Grid on flickr