Under Armour and Fanatics will take over for Majestic and Nike as the official uniform partners for Major League Baseball, the league confirmed Monday.
The deal is scheduled to begin in 2020 and run for 10 years, but sources say it could start before that should Majestic decide to bow out early.
Under the terms of the deal, Under Armour will make all on-field apparel, including jerseys and game-day and training outerwear, that is currently made by Majestic and base-layer gear that is made by Nike.
Fanatics, the largest sports retailer, will make the merchandise that will be sold to fans, serving as both the producer and the seller. Fanatics, which currently runs all four of the major North American sports leagues' online sites plus NASCAR's, will also be the distributor of the merchandise to retailers.
New Era will continue to make the hats for players and fans through at least 2019.
In this vertically integrated system, MLB teams will make a higher royalty per jersey, sources said, as a more streamlined selling process means fewer players from production to getting into the hands of fans.
Fanatics has invested $80 million in technology and production facilities in 2016, has created a wholesale division and began contracting out its merchandise sales services to teams at their stadiums.
The deal was the brainchild of Bob Bowman, the mastermind behind the league's MLB Advanced Media arm who became president of business and media for the league two years ago. Bowman's dream was to get a mass brand with major marketing power to have its logo on the uniform while having a mass retailer capable of ramping up distribution and speed to market.
Although Under Armour is on the feet of many MLB stars, including Bryce Harper and Clayton Kershaw, this is the first league apparel deal the company has signed. The brand was in the bidding for the NBA deal, which was ultimately won by Nike and starts next season.
"This is a tremendous opportunity to elevate and deliver what our brand can do on a big stage," said Peter Murray, Under Armour's vice president of global brand and sports marketing.
Murray said the deal includes working with MLB on the brand's electronic-connected fitness portfolio, but the access and the parameters on the outward display of data that comes from that information has not yet been carved out.
Fanatics will start getting broader licensing rights to use MLB trademarks next season and will begin producing gear with Under Armour as soon as 2018.
"This is the best deal for the league, the players and the fans," said Fanatics owner Michael Rubin. "The quality of the on-field gear will be outstanding, and the variety of merchandise that will be available to fans will be staggering with the most efficient delivery that the sports world has ever seen."
"If a fan wants to order gear online and have it waiting for them by the time they get to the stadium, we think that will happen," Rubin added. "We delivered Cubs championship gear by Uber to fans in Chicago. We only see that getting bigger."
Starting in 2020, the Under Armour logo will be on the front of all MLB jerseys.