Late yesterday, Nike Inc. filed suit against Reebok and parent company Adidas over what it claims is the unlicensed selling of Jets uniforms bearing Tim Tebow's name and number. The full lawsuit is below, but the Cliffs Notes version is this: the league's most popular player (and jersey seller) changed teams during a one-month period when the NFL's apparel licensing deals are in limbo.
Tebow Jets jerseys began hitting stores and online retailers the day after the trade was announced. Inventory was scarce, but Reebok was sending them out as quickly as they could make them. It's a race against the clock for Reebok, because the NFL recently signed a five-year licensing deal naming Nike as the official supplier of NFL merchandise. The question at hand: when does that deal go into effect?
Nike's deal with NFL Licensing begins April 1, and that's the date all their promotions have been centered around. Two days later Nike will hold an event unveiling the league's new jerseys, and online pre-orders will begin April 15. The new Nike uniforms won't physically be available until April 26, the day of the draft.
But manufacturers must make separate deals with the league and the union, and while Reebok's NFL deal expires March 31, their contract with the NFLPA expired on Feb. 29.
So March is a no-brand's land, when Reebok's no longer allowed to put players' names on jerseys, but Nike's not yet allowed to put team names and colors on them. With Peyton Manning in Denver and Tim Tebow in New York, two of the hottest moneymakers aren't available for the moneymaking.
According to Nike,
As of March 1, 2012, Reebok's rights under its NFL Players group licence were limited to, at most, the right to sell out existing inventory of products identified to individual players existing prior to March 1, 2012. For Tebow, that would mean existing Denver Broncos inventory—not new New York Jets products.
In short, Reebok may create new products featuring NFL Marks, but not new products featuring an individual player, without such player's authorization or consent.
Nike's grievance is that Reebok flooding the market will cut into sales of the new jerseys next month.
The opportunity to sell the first Tebow-identified Jets apparel is a unique and short-lived opportunity. It is unlikely that a consumer who purchases an unauthorized Tebow-identified NFL jersey or t-shirt from Reebok this week will purchase an authorized Tebow jersey or t-shirt from Nike the following week. Unless Reebok is restrained from supplying unauthorized Tebow-identified Jets apparel, the current unique consumer demand for these products will be satisfied or substantially reduced, and the opportunity for Nike to fully realize the benefits of this unique period of demand will be lost forever.
It's not clear why Nike isn't going after Reebok's Peyton Manning t-shirt jerseys, now on sale in the Broncos online shop. (UPDATE: Manning is a Reebok guy, and presumably gave his permission to Reebok to use his name. The lawsuit specifically mentions that Tebow did not give his permission to Reebok.) Or maybe it's just visibility. The lawsuit devoted an entire section, headed "The Tim Tebow Phenomenon," to explaining just who Tebow is and why he's so popular. I think that's a very fair inclusion, because if Tim Tebow weren't Tim Tebow, Reebok wouldn't be reopening shuttered factories to pump out as many of his jerseys as physically possible before April 1st.
Nike is requesting that Reebok be forced to destroy all Tebow Jets jerseys they've produced, and pay actual and punitive damages.