Michigan's Nike deal worth $169 million

Rod Beard
The Detroit News

Michigan's mantra is "Leaders and Best."

In terms of college apparel deals, it has achieved that goal.

After announcing last week a reunion with Nike, Michigan officials announced the financial details Wednesday: A deal valued at $169 million that begins Aug. 1, 2016 and runs through 2027, with a school option to extend it to 2031.

Nike will supply uniforms, footwear, apparel and equipment for all 31 varsity athletic teams.

The financial terms total $122.3 million guaranteed, with Michigan receiving $12 million cash up front (due Thursday), $56.8 million in equipment and apparel and $53.5 million total in cash, paid annually.

The cash breakdown includes $4.82 million each year in base compensation for the first 10 years of the deal, then $5.32 million in 2026-27, totaling $122.8 million. In the final four (option) years, Michigan would receive $5.82 million per year in cash ($23.3 million total) and another $23.4 million in apparel.

By comparison, Notre Dame's agreement with Under Armour was reportedly for 10 years and $90 million. But because Notre Dame is a private institution, it does not have to reveal the details of its deal.

Michigan's current deal with adidas, which runs through July 31, 2016, was the largest among public universities, worth $8.2 million per year in cash and equipment.

Under Armour and adidas officials also submitted bids to Michigan. The News filed an open-records request for the proposals submitted by all three manufacturers, but the university's Freedom of Information Act office denied the request saying there were "no responsive records."

A report Wednesday by ESPN business reporter Darren Rovell indicated Nike's proposal was the smallest financially of the offers.

"I would say to you they were close to this (Nike deal)," Michigan interim athletic director Jim Hackett said last week. "There's a difference. There's a 1-2-3 ranking, that's as far as I'll go about it. Michigan was not going to have to diminish the choice because one was clearly more financially lucrative than the other."

Hackett, who took over when Dave Brandon resigned under pressure in October, said first-year coach Jim Harbaugh's vote was cast early for Nike.

"His second day on campus," Hackett said.

While Michigan is at the top of the financial heap, Florida State is the next-highest Nike public university, according to the Portland Business Journal, which maintains a database of college apparel deals. The deal for the Seminoles was $4.4 million in 2014.

Among adidas schools, UCLA received $7.5 million, Kansas $6.4 million and Louisville $5.7 million.

"This decision, this partnership is about more than Michigan athletics; at the core, it is about our University community and it is about two great names reuniting for an opportunity that speaks to more than uniforms and apparel," Hackett said in a statement released by school officials. "Nike is a recognized leader in its field when it comes to product innovation and we look forward to future collaboration."

Also included in the agreement are three student summer internships (paying $15,000 each) at Nike headquarters and the use of the Jordan brand "Jumpman" for the men's and women's basketball teams.

Michigan also receives a 15 percent royalty on the gross sales of Nike gear at retail. Over the 11-year life of the contract, that provides a minimum $18.4 million in addition to the other figures.

The deal also includes "a collaboration throughout the agreement on innovation initiatives in sports technology, design and best practices, with at least two community events per year that support and celebrate education in health and wellness initiatives," according to a Michigan release.



Angelique S. Chengelis contributed