As if schools didn’t already have enough financial concerns…

Ouchy ouch.

Under Armour is attempting to break its 15-year, $280 million contract with UCLA.

“Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period,” the company said in a statement Saturday. “The agreement allows us to terminate in such an event and we are exercising that right.”

UA, of course, has other licensing deals with schools, like Notre Dame, so the interesting question is whether this is a one-shot situation, or a harbinger of things to come for others.

20 Comments

Filed under It's Just Bidness

20 responses to “As if schools didn’t already have enough financial concerns…

  1. Holiday Inn Bagman

    The corona virus is going to bleed under armour out. They’re already under investigation for accounting practices and all their main sales channels like Kohl’s are locked up. They’ve been posting big losses even before all this started and I see this as another sign that they’re struggling to survive. If I were ND or Auburn I’d be thinking through some contingencies.

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    • sniffer

      I think its a PAC-12 thing. The fan interest isn’t as deep or wide as the other four major conferences and if a program isn’t winning, fans ain’t buyin their gear. UA is big in golf and fitness/lifestyle apparel. I don’t know if the investigation will break them or not but they have to sell merchandise for that UCLA deal to work for them. Maybe Larry Scott can find some private equity firm to buy up the surplus and send it somewhere.

      Liked by 1 person

      • Holiday Inn Bagman

        Definitely a fan interest thing but a healthier company would take their lumps and try to work through this deal because no school is going to sign or renew with them now. Milking Nike or Adidas on a merch deal just got harder..

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      • practicaldawg

        That’s what I was thinking. The PAC 12 was not healthy pre-covid, so some straws may start breaking some camels’ backs.

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      • The other Doug

        The fan loyalty isn’t there, but California has about 40 million people and 15 million of them live near UCLA, plus UCLA is a national brand. The potential is there, but people aren’t attached to the brand. I think it’s because UCLA isn’t a school a regular Californian can attend.

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  2. Reverend Whitewall

    Saw somewhere on Twitter that Cal’s merchandise has all been removed from the UA website as well, so they may be the next announcement to come.

    Liked by 1 person

  3. The Dawg abides

    If they fold or get out of the business of signing colleges to these type deals, that’s one less company in the recruiting game once the NIL situation blows wide open. UA wouldn’t be around to sign some 5-star high school junior from Atlanta to an endorsement deal and then force him to go to Auburn.

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    • Union Jack

      Under Armour could be in trouble and might be reducing some of their expenses to make the company attractive as a buyout target. However, what if they are renegotiating or discontinuing institutional deals in order to be flexible to sign NIL deals with collegiate student athletes? It would be much less expensive.

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      • The problem is these kids will not be able to wear the shoes of their equipment company’s choice in a game unless it’s the same as the school’s. Any NIL solution is going to require that all student-athletes will wear the equipment assigned to them with no alterations. If Zeus White signs a deal with adidas, he’ll be wearing Nike in any official team event he is representing the university.

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        • The Dawg abides

          That’s exactly why the shoe companies are going to sign the elite recruits while they are still in high school, and the contracts will require the kids to only consider schools that have a deal with said shoe company. This was already happening in basketball under the table, as the recent FBI investigation revealed.

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          • Hunkering Hank

            TDA – I think you are right. There is no way the shoe companies (esp. Nike) won’t be gaming the NIL situation in a way most do not realize.

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  4. Other than USC, which is also in decline, the interest in UCLA football and Cali as a state has been very low.

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  5. Isn’t South Carolina one of their schools, too. I’m certain they were at one point. Of course, I’d have to say that even SC is doing better that UCLA at this point. They used to be a power in just about all the men’s and women’s sports but I can’t think of any now.

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  6. TN Dawg

    Nike lost around $800 million in its latest earnings report.

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    • Classic City Canine

      I’m guessing this has more to do with the weakness of UCLA (and the PAC 12) as a brand partner than anything else. Somehow that school has managed to turn itself into an athletic dumpster fire. No wonder Under Armour is bailing.

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  7. I’d love for new balance to get involved as one of few made in USA sports apparel companies. Seems like good marketing nowadays. Communist free.

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