Adidas (ADDYY) has signed on as a founding partner of the Pacific Pro Football League, a developmental league for players who seek an alternative to college football. In addition to the company’s involvement in the formation and development (branding, marketing, design etc.) of the new league, Adidas will be the exclusive footwear and apparel supplier of the 4 Southern California based inaugural franchises. Scheduled to launch in the Summer of 2019, the league will provide NFL hopefuls with the opportunity to be paid while waiting to become draft eligible (NFL rules require players to be 3 years out of H.S.). Pacific Pro Football League CEO (and NFL super-agent, reps Tom Brady), Don Yee, has long been a vocal advocate of paying college football and basketball players.
Howie Long-Short: ADDYY CEO Kasper Rorsted announced that the company grew revenue “15%-20%” (to more than $24 billion) in 2017; crediting increasing e-commerce sales and strong sales numbers within China (their most profitable market) and North America for driving the growth. Rorsted’s statement aligns with previous guidance issued; projecting 2017 sales to increase 17%-19%, on a currency adjusted basis. ADDYY will release its full-year ’17 earnings report on March 14th.
Fan Marino: Unlike the XFL, the Pacific Pro Football League envisions itself as a feeder program for the NFL; a far more attainable goal than competing with the NFL for talent. The 2017 NFL rookie minimum was $465,000; even if Vince McMahon could convince 6th and 7th round picks to join him by offering them $500,000 and was willing to spend his entire $100 million investment on players, he doesn’t have enough capital to fill 4 53-man rosters. H.S. graduates without a college degree are lucky to find a $30,000/year job with benefits. Yee understands the dynamics working in his favor (NFL CBA, lack of alternatives for players) and he’ll land better players at far lower salaries, as a result. I like this league’s chances to succeed.
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