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Nike Extends Partnership with USATF

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Athletic apparel, footwear and accessories retailer, Nike Inc. (NKE - Free Report) and the track and field National Governing Body, USA Track & Field (USATF), extended their long-standing partnership, dating back to 1991, to provide enhanced support to competitive groups, athletes and programs of USATF. The newly entered deal extends the expiry period of partnership from 2017 to 2040.

Per the renewed partnership deal, this global designer of authentic athletic apparel, footwear, accessories and equipment, will continue to be the sole sponsor and provider of all the required products to the world’s leading Track and Field Team. In acting as the official sponsor of USATF, Nike will also be handling the supplies of apparel, footwear and all product categories, and exclusive athletic footwear and apparel licensee, within running and route tracking app and social network category.

In the past, Nike has worked with the USATF to design and sponsor the Olympic uniforms in the prior 6 games.  

Additionally, the latest deal facilitates USATF to completely support Paralympic and masters track & field teams via authorized outfit designing of the existing Team USA gear. Further, under the partnership deal, Nike, as USA Track & Field's National Team Sponsor, will retain the sponsorship of all of its championships, both Indoors and Outdoors. Moreover, it will design garments for all USATF teams, competing on international arenas like World Championships, World Junior Championships. Olympics, Pan American Games and others.

Though the financial terms of this partnership were not revealed, media reports suggest that the deal’s remuneration has a mix of both cash and kind.

As per the Chief Executive Officer (CEO) of USATF, this new agreement will be a “game-changer” for the sport and what this governing body can offer to its members.

As per certain media reports, the news of this extended partnership came as a reaction to the collective threat of action by USATF’s athletes against this governing body. The athletes expressed their dissatisfaction with a controversy which arose in the February meet, where two athletes were disqualified on grounds of reported interference with opponents, trained by Nike’s long-distance runner, Alberto Salazar.

Though one of the debarments was reversed, ambiguity still remains regarding the second one, leading to rivals doubting Nike’s influence on the game and USATF rules.

Also, many companies like Brooks of Berkshire Hathaway and Saucony brand of Wolverine World Wide Inc. (WWW - Free Report) have agreed to support these athletes in case of any collective action.

However, USATF’s management believes that this deal with Nike will enable them to focus on both, scope and growth and hence they consider support from this athletic retailer crucial.

Nike currently carries a Zacks Rank #3 (Hold). Other better-ranked stocks in the retail sector include Barnes & Noble, Inc. and Bon-Ton Stores Inc. , both holding a Zacks Rank #1 (Strong Buy).

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