The “all-school deals” between sports apparel brands and top Division I universities are getting bigger. And bigger. And bigger.
Last summer, The University of Michigan landed an 11-year apparel deal (with the option to extend to 15) with Nike, reportedly worth $174 million to the school. At the time, it was the biggest ever deal of its kind. Then in October, The University of Texas blew Michigan out of the water with a 15-year Nike deal worth $250 million. Then in January came Ohio State University, which signed a deal with Nike that topped the Texas deal, as news outlets feverishly declared at the time. The 15-year contract was reportedly for $252 million — OSU owned the new “biggest college apparel deal ever.”
Now, once again, there’s a new king: University of California Los Angeles's 15-year deal with Under Armour, first reported by ESPN, will begin July 2017 and is believed to be worth $280 million.
That is a staggering figure. But it should come as no surprise. The agreed-upon market value for these long-term relationships is climbing just like tuition, and, for now, it shows no sign of stopping. In other words: UCLA's Under Armour deal won’t keep the "biggest ever" crown for long; the next big-school apparel contract will likely best it. In fact, the biggest college apparel deal has changed hands between the big three apparel brands five times in two years.
It’s worth asking why these deals are inflating so quickly.
While endorsement deals with individual pro athletes (think of Adidas landing James Harden last summer, or Under Armour signing golfer Jordan Spieth at just the right moment) or with full pro leagues (Nike picked up the NBA apparel contract from Adidas) may seem sexier, there is a reason the big three sports apparel giants keep furiously vying to sign big schools. Each deal is a bet on brand exposure, a hope that when Carl College Football Fan watches his favorite school play, he notices that UA logo on their helmets and jerseys, and, either consciously or unconsciously, begins to favor the brand more (and, ideally, purchases it for himself next time he stocks up on workout gear).
And it’s about more than success on the field. An all-school deal means more than just a helmet logo — it extends to the school store and thus the campus and classroom. An Under Armour school typically sells only Under Armour licensed apparel to its students. And an all-school deal gives a brand opportunities for marketing activation to the school’s alumni. (But make no mistake: When it comes to football, the ultimate hope is to have a sponsored school in the College Football Playoff National Championship; this year, both schools in the championship were Nike-sponsored.)
In a press release explicitly boasting that the deal is the largest in the history of the NCAA, Under Armour said the contract reflects, "UCLA’s status as a world-class institution and Under Armour’s position as a global leader committed to collegiate athletics."
Where does this leave Adidas? UCLA’s apparel deal had previously been with Adidas. So had Michigan’s. The German apparel giant also lost to Under Armour in the bidding process for Wisconsin and Notre Dame. So is the UCLA contract yet another loss for Adidas? Not necessarily. Each deal in this school sponsorship race — even a record-setting one — is incremental. While Nike has scored Michigan and Ohio State, and boasts perennial football factories like Clemson and Alabama, and Under Armour's roster includes Auburn, Notre Dame, and of course the University of Maryland, where founder Kevin Plank played football and created the company, Adidas is not without its own gems: Texas A&M, University of Kansas, Mississippi State, North Carolina State, Indiana University, and Louisville, among others.
No single school is the "end all, be all" in this contract cold war.
The more interesting question about these deals might be whether their inflating values says anything about the ongoing debate over whether student athletes ought to be compensated.
UCLA’s own starting quarterback, Josh Rosen, said so on his own Instagram account when news of the whopping contract broke: “We're still amateurs though... Gotta love non-profits #NCAA,” he wrote, alluding to the NCAA’s “amateurism” rule, under which it has staunchly refused to compensate student athletes beyond tuition.
He later deleted the post.
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.