NFL’s concussion problem is hurting helmet manufacturers
The NFL concussion crisis has hit the league’s helmet makers where it hurts: in the wallet.
Riddell, a leading manufacturer of football helmets for the past 85 years, has been struggling without success to sell itself in recent months despite its market dominance, sources told The Post. Ditto for No. 2 Schutt Sports, which recently canceled an auction of the company that makes helmets for NFL stars like Cam Newton and Julio Jones.
One big obstacle is Leonard Marshall, the former New York Giants great who is leading a class-action suit on behalf of 4,500 former NFL players against Riddell, alleging the company until 2002 had not properly informed players about the risks of concussions despite knowing better.
The legendary lineman says he got a call in July from possible suitors, who offered him cash and an equity stake in the company in exchange for dropping his suit.
“I’ve spoken to people interested in purchasing Riddell and they have asked me to set aside my claim,” Marshall told The Post.
“I am not going to drop my lawsuit because I am part of a much bigger picture,” said Marshall, who is most famous for his brutal 1991 hit that knocked Joe Montana out of the 1991 NFC championship game.
“I feel like there are too many bodies in this for me to withdraw and relieve them of liability,” he said.
Marshall’s lawyer Jason Luckasevic, originator of the NFL concussion lawsuit, declined to name the prospective bidder for Riddell, although he revealed it was a firm that primarily manufactures equipment for other sports.
Luckasevic said he isn’t worried that BRG Sports, the privately owned parent company of Riddell, will go bankrupt if his clients win their suit.
“Riddell has insurance that should cover litigation,” even if it ends up being $500 million, he said.
Still, insiders say the legal battle is a major cloud hanging over the helmet makers’ future, even as the NFL’s own liabilities are expected to cross the $1 billion mark. The federal case against Riddell in Philadelphia is ongoing, and plaintiffs are angling to move it to California in search of a bigger judgement. Discovery in the suit is expected to begin next year.
“Take away concussions and these helmet makers would be much more valuable,” a source who considered buying one of the businesses said.
Private equity firm Fenway Partners, whose previous investments have included diamond seller Harry Winston, bought Riddell in 2004. It now owns Riddell through BRG, which in recent years has sold off most of its other assets including Easton-Bell helmets.
Riddell this June named quarterback legend Peyton Manning as a strategic advisor and pitchman.
“Riddell has been for sale forever and can’t find a buyer,” a source close to the situation said. “They want to sell Riddell because Fenway needs to close its fund.”
Meanwhile, Platinum Equity-owned Schutt has been for sale through the Park Lane investment bank seeking about $40 million, two sources said.
But Schutt cancelled the auction a few months ago after Riddell countersued it in a dispute over patent infringement.
Riddell is the biggest football equipment maker with about $200 million in sales, and Schutt is second with $55 million.
Platinum bought Schutt in 2010 out of bankruptcy for $28 million, so it is free of the concussion liabilities that burden Riddell.
Still, suitors also have bigger-picture concerns about the popularity of football, sources said.
The market for helmets for varsity high school football on up is stable, but the number of players from 8 to 12 years old has decreased as kids move more to flag or protected flag football, the source close to the situation said.
Riddell, Fenway Partners and Park Lane declined comment. Platinum did not return calls.