Nike Reaches $252 Million Deal to Extend Sponsorship at Ohio State -- Update
January 14 2016 - 6:22PM
Dow Jones News
By Ben Cohen and Sara Germano
Nike Inc. has agreed to a $252 million deal with Ohio State
University to extend its existing sponsorship by 15 years,
escalating an arms race among sportswear makers and top sports
schools.
Ohio State will receive $112 million in product from Nike and at
least $103 million in cash, not including royalty income, according
to terms of the contract reviewed by The Wall Street Journal.
The agreement, most of which will take effect with the 2018-2019
season, includes more than $41 million in commitments beyond the
Buckeyes' athletic department to include scholarships and
internships for non-athletes at Ohio State.
In the last year, Nike has also signed a 15-year, $250 million
renewal with the University of Texas at Austin and reached an
11-year, $169 million deal with the University of Michigan, Ohio
State's rival. Nike takes over the contract with the Wolverines
after the school's current deal with Adidas AG expires this
year.
Ohio State Athletic Director Gene Smith said the school was
first approached by Nike in 2014 about extending the contract and
finalized its renewal in the last month. During that time, the
Buckeyes won a national title in football and Ohio State executives
waited for the outcome of Nike's negotiations with both Texas and
Michigan before finalizing its terms.
"We internally decided to wait to see how those two, in
particular, turned out," he said. Mr. Smith said that after the
Texas deal was finalized, Ohio State negotiated more favorable
terms in its licensing agreement with Nike.
Nike declined to comment.
The exchange between Nike and and Ohio State sheds some light on
the negotiations between sportswear makers and college programs.
Adidas has in recent months added the University of Miami and
Arizona State University to its roster of collegiate partnerships,
a cornerstone of the German company's mission to halt sliding sales
in the U.S.
Under Armour Inc., a growing rival in the American sportswear
market, has in the last year signed agreements with the University
of Wisconsin-Madison and Yale University, its first entry into the
Ivy League market.
Ohio State, a school that insists on being known as the Ohio
State University, has backed up its boasting on the football field
in recent years. The Buckeyes won the first College Football
Playoff national championship in early 2015, and they are
considered perennial contenders for the title under coach Urban
Meyer, who has lost a total of four games in four seasons at Ohio
State.
The state's flagship school has closely aligned itself with
another recognizable Nike pitchman. LeBron James, an Ohio native,
never went to college, but the Cleveland Cavaliers star player has
attended several Buckeyes football and basketball games over his
NBA career, and he was covered in confetti while standing on the
sidelines for Ohio State's football title last year.
Nike said last month it had signed Mr. James to a lifetime
endorsement deal.
Write to Ben Cohen at ben.cohen@wsj.com and Sara Germano at
sara.germano@wsj.com
(END) Dow Jones Newswires
January 14, 2016 18:07 ET (23:07 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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