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Short news...5/7/04 NEW FORMAT

MAY 07, 2004 -- Baseball Backs Down On Selling Bases

Major League Baseball, bombarded with complaints, has decided to scale down its original plan to sell the bases and on-deck circles in 15 stadiums to Columbia Pictures to promote Spider-Man 2. The logos will not be seen on first, second and third. Fans paying huge ticket prices will certainly get their monies worth in that Spider-Man 2 movie trailers will be seen on stadium scoreboards. The logos will still be placed on the on-deck circles, but only with the permission of the home team. The logos will also appear on ceremonial pitching rubber and home plate, although both will be replaced by the standard base during play. Jacqueline Parkes, baseball's SVP/marketing and advertising, tried to put a positive spin on the fiasco. Although the decision was virtually unanimously slammed, she told USA Today: "It just shows the strength of major league baseball and the place people put it."

Collegian Loses Suit Over Under Armour, Bolle Endorsements

The Colorado Court of Appeals tackled Jeremy Bloom's plans to accept endorsement money from Under Armour and Bolle. He's a member of the University of Colorado football team, but he also wants to compete on the US Ski Team. He signed a three-year contract with both companies, who are sponsors of the ski team. He felt he should be able to take the endorsement money since he does not ski for CU. But Judge John Dailey supported the NCAA in its position that he could not stay on the football team if he accepts ski money. The judge wrote, "The NCAA bylaws prohibit every student-athlete from receiving money for advertisements and endorsements." Bloom said he needed the money for private ski coaching, training and travel. The NCAA said that it needed to win in order to protect amateurism in college sports.

German Retailers, Manufacturers Face New Burdensome Costs

The German economy is much more highly regulated than in the US. Only recently were retail sales permitted in other than two periods of the year. Store hours were also expanded, but Sunday openings are still forbidden. With the economy in the sink, retailers are having trouble making any profit. A German sporting goods chain, Hettlage-Group (45 stores), went bankrupt recently. Now a new burden may be placed on industry. In order to pressure employers to hire more trainees and reduce the huge unemployment numbers, a bill, which as passed in the lower house, calls for employers with more than 10 employees to hire a number of trainees up to 10% of their work force. If the employers don't, they will have to pay an "apprentice surcharge." An apprenticeship program is common in many German industries, but this tops anything. The bill must still pass in the upper house,

Billabong Launches New Brand, Honolua Surf

Billabong launched new brand. Honolua Surf Co. will commence as a stand-alone wholesale company separate to the Honolua Surf Co. retail division. The latter will remain the same and continue as a retail operation, comprising of 17 stores in Hawaii and two in Las Vegas, and will continue to provide a multi-branded offering, deriving about 60% of sales from Honolua-branded apparel.

"The Honolua team is really excited to partner with Billabong to develop an outstanding product that will be available wholesale and in the Honolua Surf Co. stores," said Tom Knapp, Honolua Surf president. "Billabong is a perfect match within the authentic, surf-based lifestyle culture and will offer tremendous potential for product, design and distribution opportunities through Billabong's existing international distribution network." Pat Fraley, founder and former co-owner of Counter Culture, will act as the brand director for the Honolua Surf Co. and spearhead the overall direction of the brand image through marketing, creative and general trends, as well as distribution channels, design and merchandise.

Report Shows Weakness In UK Sports Trade

A new report by industry analysts Plimsoll Publishing claims that a record 143 companies are showing the early signs of financial stress in the UK sports equipment industry. Plimsoll has undertaken a financial health check of the Top 457 UK sports equipment companies and rated each as Strong, Good, Mediocre, Caution or Danger. These ratings are based on the financial performance of each company over four years. Blaming the industry is no longer a valid excuse for poor performance, according to Plimsoll whose latest analysis rates 151 companies as Strong. These companies have no debts, healthy average margins of 2% and are proof that success is achievable in the UK Sports Equipment industry.

The Plimsoll Portfolio Analysis-Sports Equipment provides an examination of the industry and the top 457 companies operating within it. It identifies the best acquisition prospects and highlights exceptional company performance. Each company is individually analyzed using the unique Plimsoll Model, exposing each ones strengths and weaknesses. To order a copy of this 537 paged analysis today for £305 by calling Plimsoll on 01642 626400 or visit www.plimsoll.co.uk. (Source: SGB UK)

Former Nike Top Exec & Politician Confesses To Affair With Teen 30 Years Ago

Neil Goldschmidt has held a number of positions in Oregon government, including governor and mayor of Portland. He was also international VP at Nike from 1981-1985 and president of Nike Canada from 1986-87. He has just resigned from the state Board of Higher Education after confessing to an affair with a 14-year-old girl when he was 35 and the Portland mayor. In an interview with The Oregonian, Goldschmidt confessed he has lived for 30 years with the "enormous guilt and shame" of what he said was a nine-month relationship. He said his health problems, heart arrhythmia and blocked arteries, and knowledge that media accounts of the affair were about to unfold, made him come forward. He made a financial settlement with the girl in 1994.

Perry Ellis Signs PGA Tour License

Perry Ellis International entered into a multi-year license agreement to manufacture and distribute golf apparel domestically under the PGA Tour brand. George Feldenkreis, Perry Ellis International chairman and CEO said: "The PGA Tour has extraordinary name recognition and we are excited to be part of this tradition that represents the best in the world of golf. By distributing the brand through national retail stores, we will be expanding the market for PGA Tour and broadening its base of fan support." Perry Ellis will launch the new line for the fall 2004 holiday season. The golf-inspired collection of apparel products will include pants, shirts and outerwear. PGA Tour joins the Perry Ellis portfolio of golf brands that includes Ping Collection and Grand Slam.

Patterson Named SAAMI General Manager

Rick Patterson, director of facility development for the National Shooting Sports Foundation, has been named managing director for the Sporting Arms and Ammunition Manufacturers' Institute. NSSF and SAAMI president/CEO Doug Painter said, "Rick has a strong background in technical areas and experience with key environmental issues related to the shooting sports. We are pleased that he will be bringing this expertise to SAAMI." Patterson will continue to direct NSSF's facility development division and work with the National Association of Shooting Ranges. Patterson joined NSSF in 1997 and guided the development of NASR to promote professionalism among shooting-facility management and to provide guidance with facility development, as well as with the many complex community and environmental issues that shooting ranges must deal with today.

For his leadership in helping develop official lead-management guidelines for ranges, the EPA awarded Patterson its "Environmental Quality Award" last year. Patterson has served on SAAMI's Environmental Committee for six years.

In commenting about his new role, Patterson said, "One of SAAMI's biggest challenges will be addressing new technologies in a way that will not compromise the industry’s heritage of producing some of the highest quality, best value and most reliable mass-produced products in the world." Founded in 1926, SAAMI is an association of the nation's leading manufacturers of sporting firearms, ammunition and components. It handles both domestic and international technical and regulatory issues that affect the industry. It is involved in the publication of industry standards, coordination of technical data and promotion of safe and responsible firearm use. SAAMI has published more than 700 voluntary standards related to firearms and ammunition quality and safety.

SHORTS: Reebok, Foot Locker and Pacific Sunwear

ISG has heard that Reebok will be building up an athletic equipment business like Nike has done. The basis would seem to be the hockey equipment business it has acquired from The Hockey Co.

Wells Fargo Securities lowered its EPS estimates on Foot Locker. For FY04, they were lowered to $1.66 from $1.70. For FY05, they were reduced from $1.93 to $1.89. The stock remains a buy at WFS.

Wachovia Securities upgraded Pacific Sunwear to outperform from market perform.


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Quick links: One-click access to topics in this article.

Sporting goods industry
Mergers & acquisitions

Honolua Surf Co.
Patterson Named SAAMI
Major League Baseball
Perry Ellis International Inc.

facility development
endorsement money
environmental issues
equipment business

Plimsoll Publishing
Jeremy Bloom
Jacqueline Parkes
John Dailey

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