The final numbers on the University of Wisconsin athletic department’s apparel contract with Under Armour were staggering when released in October.
The 10-year deal worth as much as $96 million was Under Armour’s largest ever given to a university’s athletic department. At minimum, UW will receive five times as much cash per year as in its current deal with Adidas.
The total value of the contract exceeded Notre Dame’s deal with Under Armour, valued at $90 million when it was signed in January 2014.
In October, Texas announced a 15-year, $250 million deal with Nike. Ohio State signed a 15-year, $252 million deal with Nike in January.
It seems the Badgers’ contract, which doesn’t begin until July, was more a sign of ever-growing apparel companies than anything else.
“It’s like anything,” ESPN sports business reporter Darren Rovell said. “Your deal, you really can’t compare it because it depends on when your deal is up. In the most recent round of TV negotiations, why did the Pac-12 get the deal that it did? Because it was last.”
That doesn’t mean the deal wasn’t a good one for the Badgers.
The $3 million-plus boost in annual revenue comes at the perfect time for an athletic department that is in the midst of its first year paying for full cost of attendance for those on athletic scholarships — a change that could cost as much as $2 million.
NCAA meals deregulation also allowed athletic departments to provide breakfast and snacks to student-athletes beginning in 2015, and UW Athletics was forced to increase its yearly contributions back to the university by $2 million after Gov. Scott Walker unveiled his plan to slash $300 million from the UW System.
“The Under Armour deal really comes at a very propitious time,” UW deputy athletic director Walter Dickey said. “We obviously have got expenses that even precedes (the contract) that we didn’t really fully anticipate or really fully predict.”
The $96 million total contract value can be difficult to compare to other apparel contracts. Notre Dame’s 10-year, $90 million deal, for example, includes the option to buy stock in Under Armour.
UW’s performance bonuses — which will certainly not all be met — also contribute to that overall number and are greater than most apparel deals across the country.
Under Armour will pay UW $250,000 for a football national championship; $150,000 for a College Football Playoff appearance; and $100,000 for a CFP bowl game appearance. Men’s basketball bonuses include $200,000 for a national championship, among other potential benchmarks.
In comparison, Alabama received $100,000 from Nike for winning the football national title in January.
“We were in the middle of a Final Four and had just come off another one,” UW associate athletic director Jeff Schmidt said. “I think that was something we were looking to put in there.”
Schmidt also said UW isn’t worried about any drop-off in quality when the university is forced to go outside the contract for volleyball and wrestling shoes. Under Armour doesn’t currently make shoes for those sports.
While the yearly dollar amount doesn’t quite compare to the 15-year Nike deals signed by Ohio State and Texas, UW feels it has given itself a lucrative opportunity by signing with Under Armour for just 10 years.
As these contracts increase in value, UW could cash in when it signs its next deal while other schools are stuck in an outdated contract.
“We’ve got an unknown which we think we’ll be able to improve upon in the first five years of our next agreement,” Dickey said.
The new contract with Under Armour also serves as a much-needed fresh start after a rocky relationship with Adidas. UW sued Adidas in 2012 over issues with the company’s labor practices in Indonesia, and the university had the opportunity to fully vet Under Armour over the past couple of years while searching for a new partner.
UW spoke with Notre Dame officials to gauge their satisfaction level with Under Armour, and the Badgers’ initial meeting with the company went about as well as they could have hoped.
“They actually made a presentation to us about us,” Dickey said. “They basically said, ‘This is who we think you are.’ They had a keen sense of our traditions. They were perfectly in line with our sense of who we are.”
That means Under Armour, known for their creative but sometimes over-the-top uniform designs, doesn’t plan on intruding on UW’s traditional look on the playing field.
“We don’t want to look like some schools look,” Dickey said. “We want to look like we’ve always looked. I think that was one of the things that attracted us to them, is that we are who we are and that’s who they wanted to support.”