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Monday, April 16, 2012

What's wrong with Reebok selling a Jet's jersey for Tim Tebow?

By Pankaj Ladhar of Manos • Alwine P.L.

The NFL draft is set to start next week. While the Miami Dolphins will be among all the other teams jockeying for the best talent, once each team has made its picks a whole new round of negotiations begins as teams and players seek to come to an agreements regarding a contract. But these are not the only big money contracts associated with professional football. Licensing of team jerseys and other apparel is also big business.

Earlier this year, Reebok's long term deal with the NFL to make and sell team jerseys and other apparel expired. Nike is now the official apparel of the NFL. But Reebok's agreement allowed it to sell inventory that it had already produced but simply not sold at the time that the contract expired. One jersey that Reebok sold after the expiration of their licensing agreement was a Tim Tebow jersey with his new team, the Jets. The problem is that Tebow was not traded to the Jets until after the licensing agreement had expired.

This means that the jerseys that Reebok was selling could not have been left over inventory that was manufactured prior to the expiration of the agreement, because at that time no one know that Tebow would end up with the Jets. Nike then filed a lawsuit against Reebok.

Reebok had said that it had received oral permission to sell the Tebow Jets jersey, but was unable to offer any evidence to back up that claim. The federal judge in the case issued a preliminary injunction which meant that Reebok had to stop selling the jerseys immediately while the issue was litigated. Following the injunction, Nike and Reebok were able to reach a settlement which resolved the matter.

Source: Forbes, "Judge Blows Whistle On Reebok's Tebow End-Around," Daniel Fisher, April 11, 2012


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