Took a quick read through the term sheet that MgoBlueprint helpfully shared. Some of the more interesting business terms from my personal perspective:

Compensation/Product Supply:

Advanced Base Compensation (payable within 10 business days of executing a definitive agreement): $12,000,000

Annual Base Compensation:

• $4,820,000/year for contract years 1-10;
• $5,320,000 for contract year 11; and
• $5,820,000 for contract years 12-15 (if exercised).

Royalties:

• 15% of "Net Sales" (which is separately defined in nike's standard sponsorship template) of licensed products sold during each contract year.
• Aggregate royalties will be at least $18,370,000 over the initial 11-year term or $25,050,000 over the full 15-year term (if exercised). These amounts appear to be minimum royalty thresholds, rather than caps.

Product Supply:

• Retail value of supplied products will be $5,300,00 in the first year, decrease to $4,700,000 in contract year two, and then increase in each subsequent year by $100,000.
• Michigan will have the right in contract years 6 and 12 to negotiate to replace the $100,000 annual increase with "another mechanism that acknowledges market place changes and helps to maintain UofM's purchasing position." As a practical matter, I imagine Michigan's leverage in these negotiations will likely be tied only to Nike looking towards winning a future renewal, but it does appear that a renegotiation mechanism of some sort is at least being discussed.

Perhaps most interesting to me is that this $122.32 million figure that's being thrown around for the first 11 years seems to only account for the Advanced Base Compensation, Annual Base Compensation, and value of the Product Supply. By my read, this number does not account for the guaranteed minimum of at least $18.37 million in royalties. While everyone in the media seems quite focused on this $122.32 million number, I think the guaranteed royalties would value the first 11 years of the contract at a minimum of $140.69 million, or roughly $12.79 million per year, notwithstanding the potential to exceed that amount based on high royalty sales (i.e., if "Net Sales" exceed roughly $122.5 million over the 11-year term, the royalties number would be even higher than the $18.37 million that is already guaranteed).

If Michigan extends, the contract would be worth a minimum of $194.05 million, or roughly $12.94 million per year, again notwithstanding the potential to exceed that amount based on high royalty sales. Anyone is welcome to chime in if they disagree with that read, though. Either way, as others have mentioned, this royalties clause is most certainly a "WD Clause".

Other Interesting Terms:

• Michigan will be able to purchase additional products at wholesale prices, and Nike will try to accomodate other recreational sports at Michigan by providing them with the opportunity to participate in favorable pricing on Nike products.
• Nike will propose any product styles to Michigan at least 2 months prior to the relevant order date to allow Michigan to review and approve the styles.
• Nike will also make its "Graphic Identity Group" available to Michigan for a comprehensive branding review and for team uniform design, both prior to the effective date and from time to time during the relationship.
• Men's and Women's Basketball will be covered by Jordan rather than Nike, and Michigan can ask Nike to supply other Michigan's other varsity programs with Jordan gear to the extent Nike agrees to do so at any other schools.
• Nike will offer three summer internships to Michigan students "at a minimum cost to Nike of $15,000 per intern". Unclear if "minimum cost" is intended to mean the same thing as "compensation" or not.
• Interestingly, the term sheet acknowledges both parties' "shared interest and goal of improving working conditions in the subcontracted factories engaged to make Licensed Product". To that end, Nike has agreed to share information about its compliance program with Michigan, and the parties will "further negotiate appropriate language for the Definitive Agreement". Pretty vague at this point, but it definitely suggests Michigan expressed some level of concern over labor issues at Nike's subcontractors in these discussions.

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Of course, it's worth noting that this is a term sheet and not yet a definitive agreement, so there are obviously some kinks to be worked out. I'm a bit surprised that there's no "most-favored nations" provision for higher compensation paid to other Nike schools in the future (other than the MFN concept w/r/t using the Jordan brand for non-basketball sports), especially given the compensation that Nike was willing to pay, but on the whole these preliminary terms look solid for Michigan.