UCLA’s New Nike Contract Pays Less Than Half of Prior Deal With Under Armour

Eben Novy-Williams
·3 min read

UCLA’s new Nike deal will pay the university less than half of what the school was owed per year under its prior agreement with Under Armour, further evidence of a wider market correction for NCAA apparel contracts.

The total value of the Nike deal, not including incentives, is $46.45 million over six years, an average of $7.7 million per year, according to the contract. The deal kicks in July 1 and will replace UCLA’s 15-year, $280 million contract with Under Armour (average annual value of $18.67 million), which is now the subject of a legal battle between the two sides.

Under the Nike deal, UCLA will receive $43.45 million in product and $3 million in cash. The school will be allowed to transfer some of that product allowance to cash at a reduced rate. The contract also describes a separate retail licensing agreement that will be made with a student-centered non-profit related to the school.

The Under Armor contract included a $15 million signing bonus, $135 million in rights fees and nearly $113 million in product.

The Nike contract details shed light on the market for college apparel deals moving forward. UCLA, which is located in the country’s second largest media market and has a storied athletic history, is one of the most valuable college properties in the U.S. And its Under Armour contract, signed in 2016, was among the largest ever for an in NCAA program.

But the market is contracting. For one thing, Under Armour has shifted its marketing priorities away from big team deals, which means less competition among bidders. The pandemic, and looming marketing rights for individual college athletes, may also lead to further changes at Nike and Adidas, which make up virtually the rest of the market.

Under Armour invested a lot of money into NCAA schools in 2015 and 2016, back when the company was a high-flying upstart. Nike, then struggling in its home market, has since righted its North American business, while Under Armour has undergone a multi-year restructuring, which includes a new marketing approach. (Under Armour stock is currently trading at roughly 50% of its April 2016 value.)

This year Under Armour sent letters to both UCLA and Cal, signaling its intent to terminate their long-term deals (Cal’s 10-year, $86 million contract is also among the biggest in the NCAA). Under Armour also reportedly negotiated a $9.75 million buyout of its $49.7 million deal with Cincinnati and, in the pros, ended its on-field NFL deal.

Under Armour representatives did not respond to requests for comment on the status of the UCLA lawsuit, which remains in litigation in L.A. County Court. A hearing is set for April 15.

Under UCLA’s new deal, Nike will outfit all 25 Bruins sports teams. All but three will wear the Nike swoosh; the football and both basketball teams will wear the Jordan brand.

Under the contract, Nike has the option to extend the deal for two addition years. Those two years would be worth $15.4 million, in total cash and product.

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