Nike: Rumor is $10m/year + other tidbits

Submitted by Mr. Yost on

I'm getting tired of the Nike threads too, but this was pretty good to get to work today. Most athletic administrators (ADs down to interns) subscribe to a daily news blast called "D1 Ticker"...today Michigan was atop the ticker.

Michiganis headed to Nike in a deal that will commence in 2016 & could be worth over $10m per year once full details of the contract are released, comes amid reports that adidas offered an historically-large & long agreement that the Wolverines passed-up to ink with the Swoosh, cash component would be significantly larger than what Nike is paying it's next largest partner in Florida State's $4.4m & would dwarf that of Big Ten foe Ohio State, UCLA will likely be the highest-paid brand in the adidas portfolio - link, link

I'm interested to know what Adidas offered, but if nothing else...Michigan flexed it's muscles against the other major Universities (when it comes to apparel - if it actually accounts for anything in your opinion).

Note: Not sure if the links work, but the blurb is what I was looking to share.

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Huma

July 7th, 2015 at 11:07 AM ^

Anyone have insight into whether the Nike deal includes an MFN clause (most favored nation / customer for the non-lawyers out there)?

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UofM626

July 7th, 2015 at 11:08 AM ^

me is the fact that I feel we left a sh*t load of money on the table from Adidas to go w Nike. If we get a $10 Mill a year from Nike, you can bet sure as sh*t that FSU, OSU, BAMA will be getting the same if not better deal when all there contracts come up. I say this because 1-2 of Nike flagship football schools will be jumping ship and heading over to Nike if Adidas is throwing up that much money. I will say this again for people who want to listen: I attended a ASU Football Camp here in Southern California last month and the new programs etc were given out with all of the Adidas schools mentioned etc and there was 0 mention of Michigan. BUT, I must say how impressed I was with the new Adidas Gear and the plans for LAZER CUTTING the equipment to actual specifications of the individual athlete. They showed some examples and damn I was kinda excited seeing this as Nike does not do this and this type of marketing and or fitting is the future. Miami just jumped to Adidas, Arizona St jumped to them as well. I just hope that Michigan didn't turn down $12-15 Mill a year to take a $6-8 Million dollar a year deal. Just my opinion as I see the other Nike schools jumping ship and or getting a better deal when there contracts are up. I also hope our deal is a escalator deal and had a sales incentive increase as well (based on units actually sold ) just my thoughts.

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Philmypockets

July 7th, 2015 at 11:15 AM ^

Nike does get more recruits, has much higher sales in apparel, because it isn't junk and that can't be disputed. We want to win and with wins the money will come. If we continue to lose and have crap gear who cares what Adidas would've paid. The apparel they sell is junk and you can't find Michigan gear hardly at all here in the South. When we were with Nike the gear was everywhere in the South. Why? because it looks great and sold. Store owners will not carry crap that won't sell and Adidas is junk. It was painful for me to see the awesome shirts in the mall other teams had available. I would have to pick which Adidas shirt was less ugly.

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Generic Username

July 7th, 2015 at 11:42 AM ^

In our contract with Adidas, there was a caveat that ensured that we were always the highest paid school that they worked with. If another school got a better contract, ours would have had to be reworked as well so that we would be paid more. I wonder if its possible that we did the same with Nike, although Im sure that would be tougher to do seeing as how Nike outfits so many other teams.

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amaizenblue402

July 7th, 2015 at 11:17 AM ^

We will know more when the full details come out.  Until then, it is only speculation.  Almost like the speculation of how much the Harbaugh contract was going to be.

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BLHoke

July 7th, 2015 at 11:21 AM ^

Everyone just assumes it's just not about the money because Adidas offered more annually... I'm not sure because I don't have a contract in front of me, but maybe it's comparable to a boxer and a UFC main event fighter... Yes, they get their base salary (In this case for UofM $10 mil annually), but they also get a percentage of the ppv buys. Maybe an apparel contracts work similarly where you can get a percentage of the merchandise sold. If that is indeed the case, then what's going to sell at a higher rate, Nike or Adidas? As a father of an 11 year old son and (Lebron, KD, Kobe, Kyrie), I can assure you, it's the swoosh.

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danimal1968

July 7th, 2015 at 12:20 PM ^

That's been the case for as long as there has been Michigan stuff.  Standard royalty is 10 percent.  The adidas contract guaranteed that they would pay a minimum of $600k a year for royalties, even if merch sales came in under that.

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Chick Evans

July 7th, 2015 at 2:11 PM ^

This is the case and how these contracts work. Again, it will be easier to analyze this once the details come out. Nike does sell better here in the US, that's a given.

But to your point of the kids wanting KD's and Kobe's and such, that's becuase of the name attached to it. Kids want the Lebron's because they're Lebron's, not Nike's. This is part of the reason why adidas chose to let go of the NBA contract. People don't buy Kevin Durant jerseys because they love adidas, they do it because they love Kevin Durant. 

Similarly, (outside of the <.05% of the fan base that posts on here) people don't buy Michigan apparel because they love Nike or adidas, they do it because they love Michigan. These deals are far more valuable to the apparel companies than the schools, you'd be naiive to think otherwise. 

Now I'm not saying I don't expect to see a spike in apparel sales, I totally do and I think the fanbase as a whole is ready to move on from the DB/RR/Hoke era, and the Nike contract ushers in a fresh start. Will it make up for the money we left on the table with adidas? I HIGHLY doubt that, but it remains to be seen. 

The thing that scares me is that it's a 12 year deal. That's a long time. A lot can change in 12 years. 12 years ago Under Armour was just gaining momentum, and still was only making baselayer/compression gear. Look where they are now. Just something to think about. 

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BLHoke

July 7th, 2015 at 6:09 PM ^

I'm not saying the name attached doesn't matter at all... I'm just saying the swoosh/jumpman has more weight in the equation. For example, I have two nephews who love KD and LeBron and own KD and LeBron's, they are growing up watching them. They also pretty much missed out on Jordan, Griffey, Penny and popular Nike designs like the Foamposites, and if they were similarly priced or as accessible as the aforementioned two, they would rather have those.

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Chick Evans

July 7th, 2015 at 8:59 PM ^

But that's apples and oranges though, since the Foamposites and Retro J's are exclusive, that's what makes them cool and desirable. A better comparison would be a Lebron or KD vs. a Hyperdunk, I'm pretty sure I know what they'd rather have. 

That being said, the exclusivity of the Jordan brand is gonna be pretty cool and give us some good exposure. 

And I'll also say Nike is a heck of a lot better at marketing their athletes/universities, hence why they sell a lot more. 

We'll see when the crop of young guys come up though, I think UA and adidas have both done a good job signing young up and coming talent. 

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BLHoke

July 7th, 2015 at 4:13 PM ^

If you think it's more about the name attached and not because Nike is the biggest, most popular and aesthetically appealing apparel on the planet I think you're sadly mistaken and here's why : There have been a slew of big time athletes to opt for endorsement deals with Adidas, Reebok, Under Armor, etc... That list includes Shaq, Steph Curry, Allen Iverson, DWade, Derrick Rose, Tim Duncan, John Wall, Damian Lillard, Kevin Johnson, Shawn Kemp, Larry Johnson, Grant Hill, Tracy McGrady, Steve Francis, Dwight Howard and probably a few more that I'm leaving out. Also, I realize that the popularity level of the players on that list varies and can't be compared to LeBron and KD's immense popularity right now... Wait, Shaq and Allen Iverson have been on that level, and Steph just was the MVP, won the Finals and was the leading vote getter in the fan chosen All-Star game. Aside from maybe Allen Iverson's first iteration of The Question, none of those players signature shoe would have sold as well as many of Nike's mid level signings and often rereales (Air Penny, Gary Payton's Glove, Charles Barkley CB4, Griffey, Air Pippen, Kidd Zoom Flights, Bo Jackson, etc.). Nike isn't successful because they have a monopoly on all the best athletes. They're successful because more often than not, their gear just looks better... And people like to coordinate their clothes along with the brand of shoes they are wearing, especially kids. Who is collegiate apparel aimed at more than the 18-24 demographic? Especially the in game equipment. That's why youngsters go apeshit every time Oregon dons a new uni. Other brands have tried similar tactics resulting in a resounding thud because it looks awful. Me personally, the last pieces of Michigan apparel I purchased were my Nike David Terrel and A-Train jerseys, Nike helmet Tshirt and a Nike sideline hat, all because I liked the color layout, design and swoosh to match my shoes. I was 16 or 17 and haven't purchased anything since Adidas came along because I hated the designs and the neon yellow. Brand matters. If it didn't, the powers at be wouldn't have signed a lower base offer sheet.

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bacon

July 7th, 2015 at 3:50 PM ^

People are missing the big picture. Nike signs Michigan and gets Harbaugh. Do you have any idea how lucrative Air Harbaugh Khaki Pants will be? Millions.

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umbig11

July 7th, 2015 at 5:48 PM ^

So much for Nike won't pay argument.
 

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TheSacko221

July 7th, 2015 at 6:46 PM ^

Wonder if the balk at the Adidas deal was in regards to the length. Maybe the yearly figure wasn't much different, but they threw more years at us and we went with a shorter Nike deal. Realistically no deal should be longer than 5 years to maximize the money unless escalators are out in the contract.

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Megatron

July 7th, 2015 at 8:38 PM ^

When that comes out in a week or so, I doubt that it will be known how much Michigan gave up to go back with Nike over Adidas maybe it will come out. I'm surprise that Maryland is number 2 behide Michigan in The big 10 and not OSU that isn't right LOL.

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