Tebow Time? Not for Reebok: Licensing and Lawsuits Between Sporting Companies

Tim Tebow has already made it well-known he is “excited” to be a member of the New York Jets after being traded from the Denver Broncos on March 21. The excitement for the quarterback’s arrival in the Big Apple led to a court battle between athletic companies Reebok and Nike.

Tim Tebow's trade to the Jets incited a lawsuit between Nike and Reebok.

Reebok has been the exclusive maker of licensed on-field apparel for the NFL since 2002 after agreeing to a 10-year, $250 million pact. Company rival Nike struck a five-year deal in October 2010 to replace Reebok when the contract expired. Nike was set to take over as the NFL’s exclusive partner on April 1.

Like he has done to opponents on the field, Tebow took the companies by storm when he was shipped to New York with 10 days remaining on Reebok’s apparel contract. In an effort to capitalize quickly on the Tebow trade, Reebok mass-produced Jets Tebow apparel to be sold in stores. In the first weekend after the trade, sporting goods retailer Modell’s reported selling more than 4,000 Tebow items.

The sales bonanza led to a legal battle between the companies. Nike requested and was granted a restraining order against Reebok on March 28 to cease sales of Tebow apparel. In the suit, Nike claimed that Reebok misappropriated publicity rights and interfered with business relationships. Reebok claimed it had an agreement with the NFL to continue selling items of up to five players who changed teams until its contract expired.

On Wednesday, that temporary order morphed into a preliminary injunction against Reebok, ordering that all Tebow-related apparel manufactured after March 1 was to be recalled. From now on, all Tebow products will be made by Nike, which unveiled its new uniforms for all 32 NFL teams on Tuesday.

Legal questions aside, the interesting aspect to the Tebow saga shows how significant an impact a player can have on sales. Nike knew it would eventually be able to start selling Tebow apparel once its new contract with the NFL kicked into gear. However, the instant demand for Tebow items was so high that it feared Reebok would garner all the possible profits from his move to N.Y. This is perhaps another reason why teams are willing to pay big money for a single player.

Photo (cc) by Jeffrey Beall and republished here under a Creative Commons license. Some rights reserved.

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