Nike, which enters the upcoming National Hockey League campaign as an on-ice licensee for seven teams, will drop that association perhaps as soon as the end of this season, sources familiar with the negotiations said last week. At the heart of the break-up, said one exec involved in the talks, was the footwear giant's unwillingness to pay the league's asking price of more than $10 million a year for a six-year deal.
NHL execs "weren't going to pull a Disney," said one marketer, referring to Disney's new and expensive TV pact. The NHL and Nike even disagreed on the overall size of the hockey apparel market, a source said.
And while league officials insist efforts are still being made at the highest levels to keep Nike in the NHL fold, counterparts in Beaverton, Ore., last week intimated the league had already hinted that Nike should find a way to exit gracefully before the fifth and final year of their deal, which would be the 1999-2000 season. That pressure, Nike-side sources said, was in deference to deals the NHL was cutting with future on-ice licensees Pro Player, incumbent licensee CCM, along with Rival, the NHL's joint apparel venture with Texfi. Assuming that cast of characters is set in stone, that would mean incumbent licensee Starter is also out.
"We're coming off a season when [TV] ratings were down, and, if you look at our exposure [on ice], it's on the back of the jerseys, which really made [Nike] question the value," said another executive familiar with the negotiations.
The loss of Nike would be embarrassing for the NHL, since it has used its association with the swoosh to trumpet its own legitimacy in recent years.
Still, bowing out of the greatest show on ice might seem incongruous for Nike in the wake of its purchase of hockey apparel and equipment marketer Bauer and the process of folding it into its own hockey organization and ancillary events, such as street hockey grass roots programs. But Beaverton is expected to use the money it had been devoting to the NHL to increase hockey player associations; to maintain and increase team sponsorships; to forge alliances with overseas hockey organizations; and to return to its old guerilla ways of pegging itself more with the athlete than the official organization. Bauer skates are used by the overwhelming majority of NHL players.
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