Underneath the logo: The anatomy of a collegiate athletics apparel sponsorship
Before we jump into each school’s contract, we need to lay some groundwork and understand the two general ways these contracts can provide value to schools.
Primarily, these deals guarantee athletic teams and departments money and/or equipment for use in competition. But secondly, they also give the school a brand relationship that can be used in recruiting and marketing.
Apparel companies contractually outline exactly what they are going to provide the school. Provisions in the contract may include:
Uniforms and equipment
Every major contract provides gear and uniforms. In the case of Nike this could include anything from jerseys and cleats to golf clubs and gloves. A deal may include a set monetary value the school can draw against, or it might detail a specific number of uniforms it will outfit for a certain number of players on listed teams. Most university deals are the former, while Utah State’s specifies uniform counts.
Cash donations and signing bonuses
When an apparel contract includes cash, it’s made in the form of a donation through normal fundraising channels. Donations may also be made to the school simply as a signing bonus.
Discounts on purchased apparel or equipment
More often than not, a clause is included in these contracts that provides for deeply discounted or wholesale purchasing of equipment that falls outside of the negotiated obligation of the manufacturer.
Cash equivalent gear and coach provisions
Most contracts include line-item dollars for gear allocated to coaches or staffs. For example, the Utes’ contract outlines "product allowance" amounts for "teams, coaches and staff, as well as coaches' camps" each year of the deal.
A school with a major brand may also get a percentage of licensed merchandise sales. Nike’s deal with Alabama gives the Tide a healthy share of the pie.
Schools may be additionally compensated through incentive clauses in the contract, which reward a team or department for on-field success. Utah has more than 12 named performance measures — BCS games, NCAA tournament appearances, etc. — which, when reached, require Under Armour to pay up.
Finally, contracts may also include provisions requiring the apparel manufacturer to buy a certain amount of advertising in magazines, display or television from the school.
Schools and players universally indicate athletic apparel has a tangible impact on recruiting.
When speaking of his school’s contract with Nike, Utah State University Athletic Director Scott Barnes said, “From a recruiting standpoint, it’s a key element,” and that it’s vital to “be with a platform kids want and love.”
Beyond the money and gear itself, these contracts are important to the schools as they give them a trusted partner in branding. Ann Argust, Associate Athletic Director of Marketing at the University of Utah said the Utes' relationship with Under Armour was quite valuable as Utah transitioned to the Pac-12.
“We’re establishing ourselves as a national brand. When people see us in the unique cool uniforms and are talking about us in North Carolina, or Michigan or throughout the entire country that is the brand expanding,” Argust said.
Additionally, Barnes said Nike went above and beyond its contractual obligations and served as an invaluable marketing partner when Utah State changed its logo and completely rebranded last year.
Editor’s note: This is part two in a five-part series on how athletics apparel contracts affect Utah’s major universities. Part one introduces the subject. part three reviews Utah State's contract with Nike, part four deals with the University of Utah’s deal with Under Armour and part five looks at BYU’s agreement with Nike.
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