As National Football League teams get ready to start knocking heads next Sunday in a preseason game, there will be one player on the field with perhaps the most at stake. It’s BRG Sports Inc., the local sporting goods manufacturer that is the leading supplier of NFL helmets through its Riddell subsidiary. With concerns over concussions ever growing, the company is being sued on multiple fronts, from NFL players to youth leagues, over the safety of its product. Indeed, some analysts believe owners Fenway Partners LLC, a New York private equity group, tried to sell off the helmet business last year when it downsized predecessor company Easton-Bell Sports Inc. and renamed it BRG – but there were no takers. Now, Fenway is stuck with the business and doing the best it can, defending itself on the legal front while releasing more advanced helmet designs it claims are safer than ever. “It’s certainly our goal to always be moving forward with the protective performance of our football helmets,” said Thad Ide, BRG’s senior vice president of research and development. “Our enhancements in design, we think, will improve the performance of our football helmets.” Riddell, based in Rosemont, Ill., remains the nation’s leading manufacturer of football helmets, but the controversy over concussions appears to have loosened its grip on the market. This year, after 25 years of only allowing the Riddell brand logo to be visible on NFL helmets, the league is barring any brand display during games. Teams could always buy authorized helmets from competitors, which include Schutt Sports Inc. in Litchfield, Ill., Xenith LLC in Lowell, Mass. and Rawlings Sporting Goods Co. Inc. in St. Louis. That, of course, leads to the obvious question: why would companies want to enter such a business, when Riddell already has paid out millions in settlements and legal fees? Paul Swinand, a sporting goods analyst at Morningstar Inc. in Chicago, likens the business to others in which high litigation costs are a fact of life – but there is still money to be made. “Think about hunting,” he said. “Lots of investors don’t want to be involved, but someone has to run those businesses.” Defensive position Riddell was founded in 1929 when John T. Riddell invented the removable cleat for use during football. Ten years later, Riddell created the first plastic-shell helmet. Riddell currently sells helmets, shoulder pads, face masks and other accessories such as knee pads, kickoff tees and footballs. Riddell is facing at least seven lawsuits, from litigation in state courts to the U.S. Supreme Court. Most recently, a class-action suit was filed by a West Virginia youth football league over false advertising allegations. The association said it purchased Riddell Revolution helmets based on claims from a 2003 University of Pittsburgh Medical Center study that concluded the helmets reduce concussions by 31 percent, research it claims has since been debunked. A total of four other class-action suits have been filed by consumers in Florida, New Jersey and California with similar allegations that arose from the study’s claims of concussion prevention. The highest profile case against Riddell, though, is its involvement as a defendant in a lawsuit filed by 4,500 former players against the NFL. The federal lawsuit alleges that the NFL withheld information related to head trauma suffered while playing football. Because Riddell is worn by the vast majority of NFL players, the helmet maker was named as a defendant in the lawsuit. The litigation specifically alleges that two of its helmets, the VSR4 and the discontinued AF2, provided insufficient padding to prevent concussive brain injuries. This month, U.S. District Court Judge Anita Brody in Philadelphia granted preliminary approval for a settlement between the NFL and former players. Brody originally denied approval earlier this year, arguing that the $675 million cap to be paid out to retired players might not be enough. The league has since removed the cap. Riddell announced it will not contribute money to the settlement and its part of the litigation is ongoing. No other helmet manufacturers are cited in the multidistrict litigation even though the NFL allowed other certified brands to be worn, but only the Riddell name could be visible on nose bumpers. Dan Arment, Riddell’s president and executive vice president of BRG, said he believes the company is being targeted because it’s the leading helmet maker in the country, with a profile raised by its NFL association. “It’s not uncommon for the industry leader to be more in the spotlight,” Arment said. “We embrace this position and are comfortable with the opportunities and issues associated with head protection.” Attorney Timothy Epstein, partner at SmithAmundsen LLC in Chicago who specializes in sports law, said the Riddell case will not conclude until the claims against the NFL are settled. “A number of plaintiffs might go away, but many will keep suing Riddell and as they move through discovery, they have the option to do that,” he said. “As with anything, litigation is a cost of doing business, particularly if you’re a product manufacturer – whether that’s an airplane, car or helmet.” Despite the ongoing NFL litigation, the company has scored a legal victory in Los Angeles County. In late March, a jury found Riddell was not liable for a football injury suffered by a former high school student who sued Riddell four years ago. The Pomona student, Edward Acuna, 17 at the time of his injury, was partially paralyzed. The lawsuit claimed Riddell could have prevented the injury with safer helmet materials. Brian Roche, general counsel for Riddell, said in a statement after the California ruling that the company firmly stands by the safety of its equipment. “Riddell will continue to vigorously defend our products when presented with baseless allegations created by plaintiffs’ attorneys and the misleading opinions offered by their experts,” he said. However, in April of last year, the company experienced a mixed result in a Denver lawsuit filed by an injured high school student against school administrators and Riddell. A jury disagreed with the claim the helmet was poorly manufactured, but it did find Riddell did not properly warn that its products could not prevent concussions. A jury award of $11.5 million was later reduced by the judge to $3.1 million. Taking hits The controversy over football concussions is fueled by a combination of forces including individual lawsuits, former NFL players who have suffered brain damage and studies that have linked not only severe concussions but repeated smaller hits to neurological disorders. Among the highest profile cases was the suicide of former NFL linebacker Junior Seau in 2012. An autopsy found that he suffered chronic traumatic encephalopathy, a neurodegenerative brain disease that can follow multiple hits to the head. Since then former players, such as Jim McMahon, a star quarterback with the Chicago Bears in the 1980s, have been vocal about linking their memory problems with repeated concussions while playing in the league. Riddell’s response has been to release new helmet designs, though some researchers are skeptical that any helmet could prevent concussions from occurring while playing football. It introduced what is considered a groundbreaking helmet in 2008 called the Revolution Speed with enhanced side-impact protection. Indeed, the helmet was the first to be given a five-star rating when Virginia Tech started a helmet research and ratings program three years ago. That helmet is still on the market and costs $169 to $274. Three years ago, the company released its Riddell 360 model, which is promoted as the first helmet to feature “energy managing materials” and a face mask that disperses energy of frontal impacts. It costs $299 to $379. Then, this past spring, Riddell introduced its SpeedFlex helmet to several college football programs. San Diego State, Miami and Arkansas have committed to use the helmets next season, while others, including UCLA and USC, have players trying them out. The most notable update on the SpeedFlex is a thin cutout at the crown of the helmet, which is said to absorb energy and further reduce head impacts. It also features a ratchet-style chin strap that was developed to stay on, even if a player takes a hard hit. The new helmets are available in limited sizes this summer and will have a full launch in September. Prices were unavailable but NFL teams began submitting orders last month. The NFL declined to comment specifically on why its exclusive partnership with Riddell was not renewed, but NFL spokeswoman Joanna Hunter said in an email: “We have always encouraged players to wear the best available equipment.” Riddell expects many college teams will not order the latest helmet immediately and instead wait to see how it is accepted. Indeed, UCLA will continue to use the Revolution Speed helmet it has used for the past two years. “My approach is to be a little more guarded, waiting to see how it goes [with other teams] at least after a season,” said Tony Perri, equipment manager who has worked with UCLA football for more than 30 years. One issue with the team is rising costs. Perri noted that typical helmet prices have jumped from $120 to about $300 in recent years across all top brands. About 60 percent of UCLA’s team uses the Revolution while the remaining 40 percent wear competitor brand Schutt. Competition has grown dramatically over the last few years as the rival helmet makers seek to get their products tested. In the latest Virginia Tech report released earlier this summer, Riddell’s 360 and Revolution Speed helmets continue to boast five stars, but so do seven other helmets from Schutt, Xenith and Rawlings. Dr. Stefan Duma, a researcher at Virginia Tech who directs the project, said helmet makers have improved their designs to reduce injury. “They have to perform well at low impacts, as well as high impacts,” he said. “As we move forward, we have to ask which helmets, based on science from independent data, reduce acceleration and therefore reduce injury.” Changing attitudes Doug Dagan has witnessed firsthand the importance of helmet ratings as the owner of Dagan Sales and Marketing, a Camarillo dealer that distributes helmets to about 75 schools in Los Angeles and Santa Barbara counties. His employees are fielding more and more questions from concerned parents and coaches. (Riddell sells directly to schools, so he works with it on a limited basis). Dagan noted that throughout the 1980s and 1990s, innovation in helmet design was fairly stagnant. So he views the upgrades in technology that have occurred every year or two since 2000 as a positive. “Six years ago, I would have had someone think nothing of buying a $500 baseball bat, but if you said a helmet was $500, they would get sticker shock. I’d wonder why they would pay that for a baseball bat but not pay as much to protect their kid’s head,” Dagan said. “Now we’re starting to see parents say, ‘OK, this is a good investment.’” If anything, though, prices will rise more as additional advanced technology is incorporated into designs. Riddell will release its InSite Impact Response System in the fall. The monitoring and alerting tool, which fits into all of its helmets, integrates sensors and telemetry equipment that attach to the interior of a helmet. Coaches are alerted to the impact by a sideline computer and monitor. The player units cost $150 each, and the alert monitor costs $200 and will cover up to 150 players. The company claims that the new system is able to determine if a particular hit caused head trauma to a player, regardless of his height or weight. Virginia Tech’s Duma said technology such as this is crucial for the future of impact sports if they want to continue to thrive safely. “When someone is injured, we want to make sure attention is given to them and to diagnose the concussion,” he said. Mixed results Since Riddell is privately held, it’s difficult to assess how the concussion controversy and litigation has impacted sales, but there is little doubt it’s affected the business. In 2003, Fenway spent $100 million to acquire Riddell, and a year later forked out $240 million on Bell Sports Corp., a manufacturer of helmets for bicycles and motorsports. Then earlier this year, just a decade after building Easton-Bell Sports Inc. into a formidable sporting goods manufacturer, Fenway sold off the baseball and softball business to Canadian manufacturer Bauer Performance Sports Ltd. for $330 million. In April, the reformed BRG moved its headquarters to Scotts Valley from Easton’s longtime offices in Van Nuys, where the company still maintains operations. There were reports Riddell was on the block but there were no takers. Arment declined to comment on the speculation. The bulk of the company’s remaining business will consist of football and cycling, as well as some action sports including snowboarding. Products are sold under the Riddell, Giro, Blackburn and Easton brands. Prior to the sale, Easton-Bell filed limited annual financial reports with the Securities and Exchange Commission due to its publicly traded debt. But it planned to use some of the proceeds to pay down its $350 million debt and has not filed anything since. However, in last year’s annual filing, the former Easton-Bell Sports attributed team sports sales increases to continued market share gains from Riddell football. Riddell’s sales are not broken out, but are included within the team sports category. The company reported a positive impact from new rules in 2011 that require football programs to retire helmets after 10 years, while it noted sales declined in 2012. Riddell’s Arment said the company has reported record revenues and financial performance for the last five years, though he won’t release specific numbers. He expects sales to pick up even more for the upcoming season. “While there have been changes to the on-field rights relationship at the NFL level, Riddell continues to be on track for another year of record performance across all levels of play,” he said. But the helmet manufacturer could face challenges from a sea change in attitude about football from parents wary of exposing their children to the dangers of concussions. According to the Sports and Fitness Industry Association, youth football numbers were down by 5.2 percent for players under the age of eight in the last five years. And, of course, this season, as rabid NFL fans sit down in front of the TV on Sunday, they might see new brands adorning the helmets of their favorite players.
