Nike to make player jerseys; Fanatics to make Nike fan jerseys

The jerseys fans wear will have the Nike swoosh, but they will no longer be made by Nike.

NFL owners unanimously approved a deal Wednesday that will give Fanatics the right to produce all adult jerseys for consumers.

Nike will still design and produce the authentic jerseys made on the field to allow the company to innovate, but jerseys for fans will be made in a facility controlled by Fanatics, which sells the most licensed sports gear in the world and hopes to one day produce the majority of what it sells.

The 10-year deal with the NFL mirrors the new decade-long contract with Nike that the league's owners agreed to in March and includes the making of Nike sideline apparel, championship product, product in every team's official store and the official NFL online shop.

For Nike, it takes it out of the NFL licensed production business while still associating its brand with the NFL and getting a royalty.

For Fanatics, it allows it the exclusive right to print jerseys made for order, meaning there's no need to stockpile inventory of players that are expected to be good and also allows the company to immediately produce on demand as players emerge. It theoretically means that the company will never be out of stock, as long as raw materials are available.

As Nike did, Fanatics will now control the distribution of licensed NFL Nike gear to other vendors.

The deal also increases margins for everyone involved. Nike doesn't have to have the production infrastructure and Fanatics doesn't have to have Nike as a middle man.

Fanatics purchased Majestic Athletic last May and is currently making Major League jerseys on- and off-the-field.

Making product with another logo on it isn't unprecedented. This year, Fanatics started making Major League Baseball fan gear with the Under Armour logo on it. Beginning in 2020, Fanatics will make on- and off-the-field MLB jerseys with the Under Armour logo.

NFL owners will make money from both sides on the deal, as they own a small piece of Fanatics, which was valued at $4.5 billion after Softbank led a billion investment round last September.