How long before counterfeits of Nike's designs hit the market?
$100. A Benjamin. A C-note.
To update my now-shamefully-outdated Reebok Cleveland Browns Joe Thomas #73 replica jersey, I'm going to have to drop $100 for the sleek, NASA-tested, CIA-approved Nike ProGiveMeYourDucats Series replica jersey.
We're not talking stitching or special "We've existed for ____ years!" patches. This is the baseline, entry-level, starter-set jersey. For $135, I could get the fake jersey featuring the "Flywire," and kind of resembling the real McCoy (pun intended), or for $250 I can have the same exact shirt as the real McCoy.
I have yet to bless the planet with my undoubtedly handsome and articulate progeny, but if I did have a little RedBeard, Jr. and I wanted to get him a #98 Phil Taylor youth jersey? $70. $70 for a shirt that will fit him for three years, tops. Given the awkward pace at which I grew, he might need a bigger size by week 13 or so.
What kind of responsible parent pays $70 for a piece of clothing? I understand making adults pay a premium, but now a working-class parent has to save an entire day's wages for a piece of mesh to make their kid's fall?
Good thing for Christmas, says the quick-thinking Nike exec.
When Nike established a $100 minimum buy-in for adults in the NFL jersey market, I doubt they considered the substantial favor they had done their competitors in the counterfeit apparel industry.
Within the parlance of law enforcement, the term "balloon effect" resonated throughout the late 20th and early 21st century.
The theory applied to the drug war as follows: as authorities intensified enforcement in one area—for instance, Miami and south Florida in the 1980's—they drove up costs in those markets to the extent that other opportunistic markets popped up elsewhere.
Like squeezing a balloon, the macro-economy of drug-supply and demand proved less malleable than it appeared. With pressure applied in one area, airflow re-distributes unpredictably.
NFL jerseys quite literally represent the paraphernalia of America's most popular legal, non-chemical (or chemicals-optional) drug-of-choice: NFL football.
During a tough economic climate, Nike's raising of replica jersey prices alienates the NFL's working-class market, enhances an already lucrative illicit market and could cost them financially in the long-term.
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During the 2011 season, informed NFL fans wondered aloud whether they should wait on buying that new jersey and see what Nike came up with this spring.
After all, if the consumer preferred the Reebok version, they would no doubt go on clearance the moment Nike released their new apparel lines. Additionally Reebok's base-line replica cost $85 in 2011, no doubt in preparation for the loss of the market in 2012. The cost after Nike's release? A 2002-throwback price of $50.
Alas, NFL fans snatched up jerseys of every team and color last season as they have now for years.
Until 2002, NFL teams wore a variety of brands: Puma, Reebok, Nike, Adidas, and even Champion and Russell Athletic uniformed NFL teams through the 1980s and '90s.
In 2000, Reebok saw fit to invest a quarter-billion dollars in an exclusive apparel-supplier contract with the NFL. By 2002 the jerseys, cleats, turtlenecks, socks and jocks on NFL fields were exclusively Reebok and competing logos could merit a fine.
In 2006 German-based Adidas acquired Reebok and four years later Nike usurped the most lucrative outfitting contract in American sports.
According to Bloomberg, NFL sales produced over half of Reebok's North American revenue over their 10-year, $250 million relationship with the league. Out of an estimated $565 million in annual Reebok US sales, NFL apparel accounted for $350 million.
Oregon-based Nike released their renditions of NFL apparel and uniforms for the 2012 season on April 3rd. The world-famous sporting goods supplier anticipates nearly a half-billion in NFL-related revenue within the first year of the contract.
NFL quarterbacks account for more jersey sales than any other athletes in North America.
Forbes attributed $200 million of the Dallas Cowboys' $1.6 billion net worth to brand strength alone in 2008.
With such a lucrative and easily replicable brand like the Cowboys' star or the Packers' "G," fans are likely to let their wallets outweigh their conscience when they can find a suitable alternative to the $100 by-the-book replica jersey. Wholesalers, often based overseas, are more than happy to meet that demand.
During the 2011-2012 NFL season, while some fans weighed their options on NFL.com, others bought and sold millions of dollars in counterfeit jerseys illegally.
Well aware of the vibrant illicit sports-apparel industry, the U.S. federal government enacted Operation Wide Sweep, culminating over Super Bowl weekend 2012.
The feds seized around $10 million in counterfeit NFL, MLB, NBA and NHL merchandise over the course of the action, with NFL apparel comprising nearly half of the seizure's total value.
In Los Angeles alone over 10,000 NFL jerseys from over 300 shipments were seized over the course of the season, valued at around $847,000.
From 2010-2011, the Department of Homeland Security witnessed a 30% increase in counterfeit NFL jersey seizures.
Which begs the question: if the government found $10 million in jerseys and the number continues to increase, how much of the $4-billion-a-year market could eventually or has already transferred to counterfeiters?
Interesting over-the-logo hand placement, offseason 2012...
If companies other than the uniform suppliers could post advertisements on jerseys, the NFL would enjoy the highest advertising premiums of all American sports.
With an advertising valuation at $231 million according to a Sports Business Journal study, the exposure value of an NFL jersey during a live game could outmatch its competitors from the other three major leagues combined.
More impressively, football by nature lends itself most poorly to on-field marketing, as players rarely spend much time alone in close-up shots in front of the camera—known as "detection" time.
These facts indicate that over half the value of Nike's owning the NFL contract still originates from sales themselves in comparison to the mere exposure.
Naturally when the NFL informed its bedmates from the apparel industry that they were now one-outfitter men, those scorned partners called their lawyers.
American Needle brought suit against the NFL and by the time the case arrived at the Supreme Court, the NFL was already well on its way to implementing another exclusive long-term deal, leaving Reebok for Nike.
By 2010 the Supreme Court had ruled that the NFL's franchises constituted 32 unique competing business entities, rather than separate divisions under the unquestioned influence of the mother ship. But this only sent the opinion back to the lower courts.
In the not-so-distant days of his team's owning the NFL's ethical high ground, Drew Brees eloquently objected to the league's delicate balance with respect to federal anti-trust laws.
Rather than allowing teams the opportunity to choose whether to cultivate relationships with local businesses or focus on gaining national notoriety through the lucrative apparel market, the NFL in effect makes a substantial business decision with a one-size-fits-all approach.
I buy an NFL jersey with the intention of spilling food, drink, sweat and tears on it. $100 seems somewhat ridiculous for what often amounts to an adult-bib.
So, same old Reebok #73 Joe Thomas it will be for me.
But Nike, do we really need the advanced-whatever technology? Whatever happened to the simple, screen printed mesh replica?
Have they been replaced with "sherseys?"
Hard to imagine, as long as cheap, reliable knockoffs are a Google search away.
Can Nike and the NFL really count on me to patiently amass a jersey-savings-fund of $100 for a new Joe Thomas jersey?
The temptation to buy five knockoffs for the price of one legitimate jersey could overwhelm...ahem...lesser fans.
As the price gap between the real thing and those knockoffs continues to broaden, that illicit market has flourished.
By pricing out a sizable chunk of their market, could the NFL and Nike be cutting off their nose to spite their face?
Only time will tell.