Nike Inc. just raised the stakes in the escalating battle to outfit top college athletic teams.
The University of Michigan on Wednesday disclosed the financial terms of its massive new contract with the sportswear giant.
The deal will provide the university $169 million in cash and equipment over 15 years, starting next July. With guaranteed minimum royalties on the sale of Nike gear, the total jumps to $194 million, making it likely the biggest contract in history between an apparel company and a university.
In recent years, the biggest checks for university deals have been written by Adidas and Under Armour.
As the industry leader, Nike has seemed unwilling to match the inflated terms of some recent deals, such as those for Arizona State and the University of Miami, which switched to Adidas for roughly double the financial terms of previous deals.
Collegiate deals are coveted by sportswear companies because they provide numerous sales channels with affluent and loyal fans — jerseys, T-shirts, sneakers and sweatshirts — and generate loads of television exposure.
But the Michigan deal signals that Nike will be at the table for the best deals. It's already extended existing deals with some of the blue-bloods of college sports, including Kentucky, the University of Florida and Florida State.
That means Adidas and Under Armour may need to write even bigger checks to get a crack at some high-profile deals that expire soon, such as Texas, Wisconsin and UCLA.
The Business Journal maintains a database of the apparel contracts of public universities.
Adidas has the five biggest deals. Under Armour's deal for Notre Dame, which is a reported 10 years, $90 million, would likely top the list, but Notre Dame is a private school and not required to disclose contracts.
The Business Journal has reported on the collegiate apparel contracts for several years. A 2013 print series looked at the size of the deals, where the money goes and whether small companies are getting unfairly pushed aside.
The Portland Business Journal is a KGW News partner.
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