After 10 years, three contracts and close to a third of a million caps sold, the relationship between the brand New Era and the Mexican Baseball League (LMB) is reaching commercial maturity. Prior to the start of a new season within the diamonds, the leaders of these organizations announced an extension of their relationship until 2027 with an expectation of sales of more than 1,000 million pesos, which they classify as a milestone.
“It represents a business volume of 1,300 million pesos for the next five years, that is why it is something historical and unprecedented, never the LMB I had had such an important contract and I think it reflects the growth of the entire baseball environment that we have experienced in recent years,” said Horacio De la Vega, president of the LMB.
With this agreement, New Era will produce more than 450 models of caps using the logos of the 18 teams in the LMB for the 2023 season and also more than 50 models of jerseys from the nine teams they dress, including home, away and alternative, just as they did with the clothing of the Mexican National Team during this year’s World Classic.
Traditional team caps like Red Devils del México, Tigres de Quintana Roo and Sultanes de Monterrey will be available in more than 1,000 points of sale around the country and the estimate is that during all of 2023 300,000 will be sold, which would mean an increase of more than 500% compared to the units sold a decade ago (29,000).
In interview with The EconomistDavid Pérez Padilla, general manager of New Era in Mexico and Latin America, pointed out that the LMB has had substantial growth within New Era’s annual sales percentages in the country, going from less than 5% before 2019 to between 10 and 15% in 2022.
“The first contract with LMB was in 2013 and it lasted five years, then there were another five and this is the third. Before this contract there was an automatic renewal but everything was very simple, because the intention at that time was simply to be able to do it (the licensing of the equipment), but I can say that now this is the first real licensing contract with all the equipment. and the rights, much more similar to what we have with the Major Leagues (MLB)”.
The general manager also told this newspaper that, for now, the LMB occupies fifth place in sales in Mexico behind the MLB, the NFL, the Red Bull Racing Formula 1 team (where the Mexican driver Sergio Pérez competes) and one more organization that they cannot reveal for confidentiality.
“Right now it is the fifth league and we would like it to go to the third in the next five years (…) We have seen that the LMB It is the business niche that is growing the fastest, which is why we are committed to giving it all we can. There has always been a lot of baseball fans in Mexico, that’s not new, but the execution is new and people are thirsty for a good product.”
Although New Era is defined as a young brand, the age range of those who most consume their caps from the LMB (with almost 50%) is between 25 and 35 years old, that is, fans already in an adult stage, but they do not rule out any target within their potential market.
The growth path for both David Pérez and Horacio De la Vega is for merchandising to become the second largest window of income for clubs in the LMBJust like in the Major Leagues. In this sense, the president of the Mexican league points out that they have already made progress, since in the last three years some franchises went from filling 90% of their coffers with the box office to close to 50% due to agreements with sponsors.
“When I started New Era in Mexico (in 2012), we did not have a license from the LMB and we produced the caps for the teams that requested them. I remember presenting the licensing scheme to have the rights, use the brands and pay royalties for that use at the Owners’ Assembly in Cancun. That did not exist and they did not have it within their spectrum, so the job was, first, to convince them that it was something positive and then to show them that there was an economic benefit for them”, narrates Pérez Padilla.
This medium tried to find out the cost of licensing the logos of the LMB and also the distribution of income for the 18 teams from the estimated sale of 1,300 million pesos within the next five years, but both the president of the league and the general manager of the brand declined to answer “due to confidentiality agreements ”.
On the other hand, the head of the LMB emphasized the good moment that the organization is experiencing in terms of the exposure of its product, citing a 700% increase in its income from sponsorship, 800% more audiences and the production of more than 2,600 hours. of television, in addition to reaching 7.4 million followers in all its social networks.
“We have more bargaining power with the brands, now the LMB has all the muscle to be able to negotiate and have a greater reach,” stressed De la Vega, who also listed the commercial agreements that the league has reached in the last three years with brands like Caliente, Spotify, G500, Jaloma and the National Lottery.
“New Era plays a strategic role with the LMB, preponderant in many ways because in the end it is the most important game clothing for a team outside of the jersey. For us all the sponsors are important, however I think that the part of the cap in particular does generate an impact and a very interesting stimulus for all those who are fans and those who are not because it is also a fashion item, a very attractive souvenir for any tourist.
Without specifying figures, the president of the LMB confirmed to this newspaper that there is direct income from New Era to the league, “like any agreement that brands make with other entities or organizations.”
Regarding the future of the relationship, De la Vega pointed out that “in the coming years” they will be working to generate products in their winter league and also more focused on the female audience.
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