BY: GABE WECHT, CONTRIBUTOR
The Wolverines have traded in the three stripes for the swoosh for the next fifteen years. With Michigan’s old 8 year, $7.5 million/year deal ending with Adidas on July 31, 2016, the three largest athletic apparel companies in America (Under Amour, Nike, Adidas) were all trying to land one of the biggest revenue makers in college sports. Shockingly, Michigan chose Nike, even though both Under Armour’s and Adidas’ offers were worth more money than Nike’s.
The official contract is fifteen years and $169 million, which makes this the richest apparel deal in the history of College Football. The contract runs from August 1, 2015 to July 31, 2027 and includes an option for a four year extension through 2031. With this new, ground-breaking deal the University of Michigan will receive $76.8 million in cash and $80.2 million in apparel. Nike will outfit all 31 of Michigan’s athletic programs from head to toe in equipment. This will break down to roughly $10 million per year.
Michigan’s Athletic director Jim Hackett had this to say about the switch from Adidas to Nike:
“After careful consideration, the right partner for the University of Michigan was Nike. 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.”
This contract surpasses the previous highest contract, which was $90 million over ten years. Notre Dame signed this contract just last year with Under Armour.
Nike’s next highest contract is with Florida State, which is only $4.4 million a year. Among Adidas’ schools, UCLA receives $7.5 million a year and Kansas gets $6.4 million.
What these constant record-breaking contracts are showing us it that this market is growing, and it seems as though it is not stopping soon. One of the main reasons for the growth in the apparel contracts is the increased popularity of college football. Last year’s national championship game, which pitted Oregon against Ohio State, received an 18.9 rating. This is not only the highest rating in ESPN’s history but also in cable television’s history. This is a 21% improvement from last year’s game. College football’s national championship game garnered more viewers than the World Series, Stanley Cup and the NBA finals. These astronomical numbers paint an enticing picture for apparel outfitters.
College basketball has also contributed to the rise in astronomical contracts. Just like college football’s ratings, college basketball’s popularity has also trended upwards. March Madness is an excellent branding opportunity as well. Last year, the final game received 28.3 millions viewers, which is 33% higher than last year’s national championship game.
Michigan has pushed the bar upwards with this new deal, but the trend doesn’t seem to be pausing. As old contracts expire, larger and larger ones will take their place, accommodating the growing popularity of college sports.
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