Breaking down Michigan's $169M deal with Nike

Submitted by UMProud on

"The return of the “swoosh” to the Michigan Athletics apparel is emblematic of much more than a shiny new contract, but of a revitalized fan base and newly energized student athletes. But still, according to students, athletes and alumni, regardless of the changing dynamics between apparel contracts and the school, the block M will always belong to fans of Michigan football.

Following the end of the athletic department’s apparel contract with Adidas, Interim Athletic Director Jim Hackett announced a new partnership with Nike. The deal, which will run through 2027, made history as the largest such contract in the history of college football at $169 million over 15 years. By comparison, the second largest apparel contract, between Notre Dame and Under Armour, totals $90 million over 10 years." 

Source: The Michigan Daily, 9/22/2015, Allana Akhtar

https://www.michigandaily.com/section/statement/nike-adidas-deal

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FauxMo

September 23rd, 2015 at 8:07 AM ^

We are (predominantly) grown men with jobs and families and responsibilities obsessing about teenagers playing a violent game that is known to cause significant brain injuries to a large number of its participants, and a branding deal with a shoe company is what you find most disturbing here? Good to know, good to know...

Joined: 06/17/2010

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LSAClassOf2000

September 23rd, 2015 at 7:09 AM ^

This isn’t the first time the University made history with a Nike contract — the University first signed an endorsement contract with Nike in 1994 for $7 million over seven years. Joe Roberson, athletic director at the time of the deal, said it was “the largest such deal in the history of collegiate sports.”

You know, I remember this (yikes, it was 21 years ago too) and I also remember thinking that it was a lot of money for an apparel contract at the time too. Man, little did any of us know....

What is interesting to me is that it references the surveys and feedback that Hackett sought back in the early spring. There was a lot of speculation at the time that some of the questions involved apparel and it seems now like this deal confirms that. Again, very nice to see athlete and student body input in some of these decisions.

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Mr Miggle

September 23rd, 2015 at 12:21 PM ^

Notre Dame has stock options as part of their deal. I don't think it's a straight 15 year deal. There are some sort of option year clauses. Our Adidas deal would have looked better when signed if it had another 6 years tacked on at $6M/per. Obviously, it would have been much worse. How will our deal look in 9 or 10 years? No one knows. I don't think the rate of increase in these contracts can be sustained for too long, but it's likely schools will sign bigger deals in the interim.

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bronxblue

September 23rd, 2015 at 12:54 PM ^

I think the counter-argument is that Nd can renegotiate in 10 years for a higher rate, which over 15 years might make more sense than being locked in for 15 years at a bit over $11M/year.  But I assume the deals for both schools have outs and accelerators that make them both a bit more fluid than 10-15 year commitments.

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leftrare

September 23rd, 2015 at 8:10 AM ^

if you figure the whole department, coaches and athletes, adds up to about 1,000, then the deal affords $5,300 in apparel per year to each of them. Seems like a lot even at full retail. Am I wrong? How many sweatshirts do you need?

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The Mad Hatter

September 23rd, 2015 at 10:43 AM ^

It's basically the only free thing the school can give them and still be compliance with NCAA regulations.  Why not have a different pair of shoes for each day of the month?

My friend played MBB in the 80's, so way before these gigantic apparel deals, and he still has stuff he wears to this day.

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WolvinLA2

September 23rd, 2015 at 11:14 AM ^

Do we know the 1,000 number you threw out is accurate?  I'm not suggesting it isn't, but could it be double that?  Keep in mind that it's not only athletes and coaches getting apparel.  Team managers, AD personnel, etc are getting a piece of this.  

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Der Alte

September 23rd, 2015 at 9:33 AM ^

I have continually negated any real significance between athletic equipment supplier and success in recruiting or on the field. Whether Adidas, Under Armour, Nike, who cared? Would D' Veon Smith run faster in Nike shoes? Would Spike Albrecht make more 3-pointers in a Nike uniform than if his shirt had the "3 stripes" on it? I know sentiment on this site runs heavily in favor of Nike and against Adidas, but in the final analysis, what does a clothing brand have to do with anything relative to success on the football field, BB court, hockey rink, swimming pool, or any other athletic venue?

The answer is probably more than I had ever thought. To middle school and high school kids, clothing is important, and clothing identified with certain sports and certain athletes even more so. How many shoes has Nike sold because Michael Jordan's name was associated with them? And I suggest that in this context, race was a non-factor: many white as well as black kids wanted to be seen in the hallways of their schools wearing Michael Jordans.

So as improbable as it might seem on the surface, whether a school is a "Nike" school or an "Adidas" school is of considerable importance to some recruits, to the point that it could influence their decision on which scholarship offer to accept. Jim Hackett and company did a lot of market research during their athletic equipment negotiations and, it seems, arrived at the same conclusion. Adidas was apparently ready to fork out as much or more money than Nike to get the Michigan contract. But the decision on an equipment supplier goes well beyond the money on the table or what clothing or shoes anyone happens to "like best" ; it's become an important factor in enhancing the Michigan "brand." Once again, Hackett and company got it right.

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Maizen

September 23rd, 2015 at 11:55 AM ^

If you don't mind me asking when did you grow up? I think it's clear Adidas took the highlighter maize to an entirely new level but overcorrected the problem this year and now the maize looks too much like Cal or WVU in my opinion. I really think the Nike maize strikes a nice balance between having a distinct and recognizable maize that looks great on HD TV and in person, while also not going overboard with the electric highlighter and keep traiditional maize elements.

Besides, Michigan doesn't have to recreate the 1970's. It's 2015 now. Bo Schembechler was great at changing. Just look at how his offense changed from 1969 to 1989. No one adopted to change better than him.

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