By Sara Germano
Nike Inc. will take over the rights to outfit the University of
Michigan sports teams next year, unseating Adidas AG from one of
its most prized American sports contracts.
Nike and Michigan agreed to a deal in principle that would begin
with the 2016-17 season and run through at least 2027, with an
option to extend until 2031, according to a statement from
Michigan. Terms of the deal weren't immediately available but are
expected to be announced next week, the statement said.
Nike had been the Michigan Wolverines' athletic gear supplier
for more than a decade until Adidas took over the contract in 2008.
Its return to Ann Arbor will coincide with the inaugural season of
Jim Harbaugh, the former San Francisco 49ers coach and star
Michigan quarterback, as head coach of Michigan's football team, a
key part of rebuilding efforts for the school's storied football
program.
"After careful consideration, the right partner for the
University of Michigan was NIKE," Jim Hackett, Michigan's interim
director of athletics, said in a statement.
The Big Ten school had been a crown jewel of Germany-based
Adidas's U.S. sports deals, particularly as the company unveiled a
five-year plan this spring that emphasized renewed marketing focus
on American sports.
Adidas was notified late Monday that the school had opted not to
renew its contract with the company, according to Adidas North
America President Mark King.
"Obviously we're very disappointed that Michigan didn't choose
us, but we can probably sign four or five really wonderful schools
as we go forward," Mr. King said. Losing the Michigan contract
would free up at least $5 million a year in Adidas's marketing
budget, he said.
Nike has been increasingly aggressive in going after contracts
held or coveted by rivals Adidas and Under Armour Inc. The
Beaverton, Ore., company in June signed an eight-year deal to
outfit the NBA beginning with the 2017-18 season, valued at more
than $1 billion, according to a person familiar with the matter.
Adidas declined to renew its contract with the league, saying it
wasn't as profitable as expected. Nike last year re-signed former
NBA MVP Kevin Durant to a contract worth a potential $350 million
over 20 years, after a fierce bidding war with Under Armour.
Last year, Notre Dame ended a long-term relationship with Adidas
in favor of a 10-year deal with Under Armour.
Write to Sara Germano at sara.germano@wsj.com
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