Published in Sports Business Journal
When NWSL expansion team Angel City FC formally unveiled its primary kit on Nov. 17, including a creative video montage featuring celebrities and team investors such as Natalie Portman and Eva Longoria, the team didn't actually have a physical product for fans to buy.
Four lone sample jerseys were used in the marketing efforts, with some of the investors in one promotional video jokingly fighting over taking home the kit. In normal times, such an approach wouldn't have been necessary, but the disruptions caused by global supply chain issues are affecting the sports industry too, and the spot illustrated what teams are doing to make the most of the current environment.
"This has been a life we've all been living for the past six months," said Katie Eaton, vice president of commerce and fan experience for Angel City, which begins play in 2022.
Jay Deutsch, the co-founder and CEO of Seattle-based merchandise agency Bensussen Deutsch & Associates, which works with U.S. pro sports leagues and teams across MLB, the NBA, NFL and NHL, among other properties, characterized the supply chain problems of the past 12-plus months as a "triple-witching hour."
Deutsch explained that with the initial shutdown of the sports calendar in March 2020, demand for merchandise plummeted, leading to a "glut of inventory" and sports entities deciding to shut down all future orders. Production ground to a halt, thus creating a raw materials shortage and further compounding the already-strained supply chains.
"It's not as easy as just flipping a switch and turning those machines back on," Deutsch said, citing that as the second component of the supply chain challenges. Demand then spiked in early-to-mid-2021 but factories around the world cut manual labor in 2020, creating even more shortages of supply.
It was then a race for pro teams and leagues to purchase whatever products they could ultimately get their hands on once labor rebounded. A bottleneck of transportation — not only for the sports business but other global industries — resulted, which has been the third element of the current supply chain headaches, Deutsch said. That included rail and truck delays but also sea, most notably at the Port of Los Angeles, the busiest in the U.S. and one that is expected to finish the year having transported a record volume of shipments.
At Angel City, Eaton said primary jerseys are now expected to arrive in early 2022. In the meantime, she has been focused on getting creative with how to obtain certain products, such as moving holiday items like wrapping paper and puzzles from overseas to locally based vendors in time for Christmas.
Charlotte FC, an MLS expansion team which also starts play in 2022, experienced similar challenges with its primary kit, which was supposed to debut in mid-November. Adidas, which along with Fanatics is an apparel partner, paid an undisclosed cost in order to expedite the overseas shipment of the kit so that fans would have the opportunity to purchase it starting with its unveiling on Dec. 9.
Team President Nick Kelly said there are now 10,000 primary kits available — roughly split between Charlotte FC and Fanatics — until more arrive in March or April of 2022. The team has about 100 different products to sell, he said, compared with what would normally be 400 to 500 items "in an ideal world."
"I feel like sometimes we work for Macy's," said Kelly, noting the team's practice of publicizing via social media newly available merchandise when it's in stock. "For the time being, every time we've had something new drop, from a hat to a car sticker, we've almost treated it like a catalog release because we want our fans to know what's coming."
Other U.S. pro sports teams, such as the Cleveland Cavaliers, have had to overcome their own restocking challenges. From Black Friday through Cyber Monday, the team's merchandise sales were up nearly 30% year-over-year compared to the 2020-21 season, and online orders for City Edition jerseys and related apparel in mid-November were up almost 125% compared to 2019-20. The Cavs have managed the situation by allowing pre-orders and messaging fans that their items might be delayed.
Elsewhere, the Pittsburgh Penguins have a hot item to offer — as long as they can get it in stores. The team's third jersey, a throwback to its early 1990s Stanley Cup winners, was announced on Dec. 1, but there's been a supply shortage, according to Nick Fenton, general manager of Aramark, the retail merchandise concessionaire at PPG Paints Arena. Aramark also runs the Penguins' main in-arena team shop in addition to two off-site brick-and-mortar locations and the team's ecommerce site, PensGear.com.
"The third jerseys have been magnified because of the demand and marketing around the jersey, but we've definitely had to be aggressive with fill-in buys to keep our normal product flow in the stores," said Fenton.
He declined to say how many of the third jerseys have been sold to date but did say the inventory on-hand for the Dec. 11 online launch sold out in 30 minutes. With the uncertainty of when those jerseys will arrive in the Pittsburgh area, Aramark and the Penguins have refrained from offering fans the pre-sale option. Another shipment of about 1,500 third jerseys is expected this week, with three more larger orders anticipated for early January 2022.
Still, BDA's Deutsch said the supply chain issue may not be solved even then, with a labor shortage and the backlog of shipping containers ready to be unloaded in Los Angeles likely to push the problem well into next year.