After USA Swimming announced two weeks ago that it was opening up bidding to suit companies beyond Speedo for official partnerships, Arena USA announced today that they have won the bidding to become the exclusive apparel sponsor for USA Swimming, as well as the exclusive title sponsor for the Grand Prix Series. They also now hold worldwide merchandising rights to the USA Swimming brand, an area that could be capitalized on with some creative work (though doesn’t seem to have been yet).
Exact dollar figures weren’t publicly released, but sources tell us that this is easily a 7-figure deal over the 8-year term of the agreement.
Speedo is expected to retain exclusive title rights to Junior Nationals and Sectionals (the Speedo Championship Series) through 2020, and AT&T will remain the name sponsor of Sr. Nationals, according to an earlier release by USA Swimming.
“USA Swimming’s relationship with Speedo USA is a vital part to our organization,” said Matt Farrell, USA Swimming Chief Marketing Officer. “Their support has been invaluable to our organization since its inception and we look forward to our continuing our relationship well into the future.”
Juniors and Sectionals had already been locked-in by Speedo by the time Arena came to the table, but Arena came in strong when they learned that the National Team honor was open. The same source informs us that the deal has been closed for a while now, but out of respect for the existing Speedo partnership at Short Course Worlds, the two sides chose to wait until today to announce.
“The National Team gear will have Arena Logos and will be exclusive,” Arena North American Vice President Tim McCool said of the agreement. “Of course, like always, any swimmer has the right to race in other brands, which is no different than [Track & Field], Soccer, Basketball in footwear, for example.”
When asked about what sort of impact the Arena brand saw from this partnership, McCool said “The biggest return is without a doubt that this solidified that Arena is not only committed to the USA Swim Marketplace, but Arena should be considered a market leader in every aspect.”
The expression “market leader” is a powerful one in business, and the message is clear: Arena, after more than two decades out of the American market, is back and looking to challenge the brand that has become synonymous with racing suits: Speedo. That is not a title that will be easily won, but after the failing of Speedo’s latest racing suit, the FS3, last year, and with Arena’s new POWERSKIN Carbon Pro line making at least a big visual impact (those are the bright blue, highlighter yellow, and pink suits that started popping up at Trials this summer) a door is open.
Arena is not without its own shortcomings, however, as the brand has expanded again in the United States. Last summer, Arena, along with many other manufacturers, came up well short of demand for their suits: leaving athletes scrambling to find alternatives. When asked about how soon American swimmers could expect to see the company increase their production levels, McCool said “We are doing that immediately. USA is a primary focus for Arena, and production of our racing suits and team products is highest on our priority as we speak.”
“The good news and the bad news of this past year,” McCool continued about the Powerskin. “This was the first time Arena introduced a racing suit at these types of price points (for example: $500 for the women’s Powerskin Carbon Pro), and therefore we were sensitive to the economic woes and the demand for such price points.”
“To be frank, it was near impossible to forecast the success that occurred with the new Arena Technology (Powerskin Carbon Pro). We have one year under our belt, so planning and forecasting the demand for our racing suits, as well as adding more machinery to manage the capacity load will solve any problems that occurred in 2012. In fact, we anticipate even greater demand for 2013 and we’re excited to introduce some new colors as well as limited edition colors during the course of the swim year.”
As for how the move affects Arena-sponsored athletes, McCool said “This gives Arena a complete story for Arena Sponsored Athletes. Up to the race, during the race, and on the podium. Arena will now have the brand visibility to tell our complete story in ‘owning the deck’ providing superior products both in the water, as well as warm ups and other team wear out of the water.”
While that sounds like a very positive for the brand, it’s not immediately clear about how brand-continuity will benefit Arena sponsored athletes. Theoretically, of course, if this new deal with USA Swimming pans out for Arena economically, there would be more money in the marketing budget and thus more money for athletes.
American swim brands are now, for maybe the first time in the information age, entering into a truly competitive market. This is a market that has long been dominated by a single brand, Speedo. Make no mistake: this is a huge boon for Arena, but Speedo isn’t going anywhere. Their brand is too big, they have too many resources, they have too many high-profile athletes on their roster (Phelps and Lochte), and their name rolls too easily off of the tongues of the tens of thousands of age group swimmers that make up the vast majority of the suit market.
The winners here are swimmers. Not just elite, Olympic swimmers: all swimmers. In a more competitive environment, we should expect the companies to began wrangling for cheaper suits. Further, much like we saw during the tech suit era, where at least in the elite high-dollar segment population raged, it should lead to better suits. Better in terms of speed, better in terms of comfort, and better in terms of durability.
Also, with a third company entering the ranks of the “majors,” (along with TYR, though their share anecdotally has eroded), this should open up additional opportunities for smaller, more agile competitors to step into the market with some impact.