PALMER TOWNSHIP — In August 2003, Majestic Athletic Ltd. — as it was then known — was named the exclusive supplier of uniforms to all 30 teams in Major League Baseball, a contract that started in 2005 and was considered a home run for the apparel company that got its start during the 1970s in the Slate Belt.
Now it appears the company that makes MLB uniforms in Palmer Township won’t get any extra innings on those jersey rights once its contract with the league expires after the 2019 season.
That’s because Baltimore-based Under Armour will outfit all MLB players beginning in 2020 under an agreement reached with the league, The Baltimore Sun reported Monday night. In addition, the newspaper reported, citing two sources with knowledge of the agreement, MLB team owners have approved the switch from VF Majestic to Under Armour.
The agreement hasn’t been announced, and a MLB spokesperson said, “We will not be commenting on the report.”
Under Armour representatives did not return calls seeking comment, and the Greensboro, N.C.-based VF Corp., which bought Majestic in 2007, did not provide additional insight.
“We don’t comment on rumor or speculation,” VF Corp. spokesman Craig Hodges said. “The Majestic brand remains sharply focused on meeting the expectations of our customers and consumers.”
While Majestic’s contract with MLB runs for three more years, losing the deal to Under Armour clouds the future of the Palmer plant, where about 620 people work. In June, VF Majestic workers voted 221-32 on a three-year labor contract, which runs through May 31, 2019, said David Melman, manager of the Pennsylvania Joint Board Workers United, Service Employees International Union.
Some 500 union workers at the Palmer facility make the team uniforms and replica jerseys for the mass market, he said.
It’s the latest twist for Majestic. In early 2007, VF Corp. committed to keep 500 of VF Majestic’s production-line jobs in the Lehigh Valley for at least three years through May 31, 2010.
Nearly 10 years after that announcement, VF Majestic is still in the Lehigh Valley. But in March, VF Corp. announced it was exploring “strategic alternatives” for its Licensed Sports Group business, a roughly $500 million business that includes the Majestic brand.
“In this respect, we are exploring options for our LSG business to position the organization to continue its success and achieve its future potential,” VF Chairman and CEO Eric Wiseman said at the time.
Many industry insiders reportedly saw the move as VF Corp. putting VF Majestic on the trading block and predicted Under Armour could be a potential buyer. Hodges on Tuesday did not address whether the company’s announcement in March was related to its reported loss of the MLB uniform contract.
For local leaders, the end of the contract doesn’t necessarily mean jobs will be lost at VF Majestic’s Palmer plant. After all, they cautioned, three years is a long time.
Melman, of the union, said: “We believe that the skill and dedication of our members is what makes the baseball uniform so successful, and it’s our intent to fight to protect those jobs and insist that they continue to be made at the [Palmer] plant by our members, regardless of who the corporate owner of the license is.”
Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp., said he is meeting with VF Majestic officials Wednesday.
“It’s far too early to understand any impact,” Cunningham said. “The company has yet to assess it and talk about its plans. The deal is three years away and a lot could happen in the meantime.”
Still, the news is concerning to its host township, Palmer Supervisors Chairman David Colver said.
“Surely, we don’t want to lose Majestic as a business in the township,” said Colver, noting the company has been an exemplary corporate neighbor.
Colver believes the company, which rents its 358,875-square-foot plant at 2320 Newlins Mill Road, has a lease that expires six months after the end of the 2019 baseball season, when VF Majestic’s MLB contract is set to expire.
The township exempts VF Majestic from paying a business privilege tax on gross sales, as it does all manufacturers, Colver said. But one loss would be on the 0.5 percent earned income tax it collects from employees. Another 0.5 percent of the earned income tax goes to the Easton Area School District, making the earned income tax a 1 percent levy.
“Just the sheer potential job loss of 600 people, I’ve got to believe a business of that size has a backup plan and something in the works,” said Colver, theorizing that VF Majestic might decide to turn out other apparel at the Northampton County plant.
But one town’s uncertainty is another’s opportunity.
For Under Armour, a brand that is just 20 years old and had been looking to make inroads with MLB, the contract represents a breakthrough. The company already is becoming a big player in college football.
“This is a major signal from Under Armour that they’re ready to play with the big boys,” said T.J. Brightman, president of Bel Air, Md.-based A. Bright Idea Advertising and Public Relations.
Elsewhere on the big-league diamond, Rawlings makes the baseballs used in games, New Era Cap Co. makes the caps and Schutt Sports makes the bases. Nike is MLB’s supplier of the baseball undershirts known as base layers.
The Baltimore Sun contributed to this story.
Get the inside scoop on the Lehigh Valley’s business scene on The Business Cycle, themorningcall.com/business. Like us on Facebook: facebook.com/LVBizCycle. Follow us on Twitter: @LVBizCycle.
: 2320 Newlins Mill Road, Palmer Township
•What it makes
: Uniforms and replica jerseys for Major League Baseball and the mass market. The company also began making uniforms this year for the Lehigh Valley IronPigs.
: Majestic got its start during the 1970s in the Slate Belt. Since 2007, it has been a subsidiary of publicly held VF Corp. of Greensboro, N.C. VF bills itself on its website as a global leader in branded lifestyle apparel, footwear and accessories, with more than 30 brands, 64,000 associates and $12.4 billion in revenue.