Ducks eye blockbuster Nike deal
EUGENE — The University of Oregon's sponsorship deal with Nike is about to get a lot more lucrative.
The university would get more than $88 million in cash and apparel and shoes over 11 years under the deal proposed by Nike, more than double the current contract. The Oregon Board of Trustees will consider renewing the school's "multi-sport apparel agreement" with Nike next Thursday.
According to the limited information in the Board of Trustee's meeting agenda, Nike would pay Oregon $2 million to $2.5 million a year in cash and provide $5 million to $6 million worth of apparel and other gear per year for various Oregon sports programs.
Under the current contract, which expires in June, Nike gives Oregon $750,000 a year in cash and $2.5 million a year worth of apparel and other gear.
The tentative pact is the proverbial win-win, with Nike getting prestige, exposure and millions of dollars annually in sales of Duck gear and the university getting Nike's cash, free gear and a cut of the merchandise sales.
The deal illustrates the continued escalation of the arms race among athletic footwear and apparel makers to outfit top-flight university athletic programs. In recognition of the enduring popularity of college sports, sneaker makers are paying ever-larger sums for the right to splash their logo on as many players and playing fields as possible.
Under Armour stunned the industry in May 2016 when it agreed to $280 million deal with UCLA that would provide the school $18.6 million worth of cash and apparel per year over 15 years. It was the biggest deal ever commanded by a university.
The relationship between athletic footwear companies and universities have come under new scrutiny since federal prosecutors in September leveled sweeping fraud charges against 10 people involved in college basketball. Four of the accused were assistant college basketball coach. Two were executives or consultants for Adidas who allegedly agreed to pay six-figure bribes to prominent high school players or their families in return for committing to play at Adidas schools.
It's unclear whether any other athletic footwear company bothered to bid for the Oregon contract. But there was little doubt Oregon would stay with Nike. The company's existing contract all but gave Nike a lock on retaining the Ducks brand — provided it wanted it.
Nike had until Thursday to request the opportunity to discuss renewing the deal before Oregon could talk to other companies. Nike also could match or exceed any outside offer received after Thursday. The current contract requires Oregon to re-up with the Swoosh so long as the terms were equally favorable.
Company co-founder Phil Knight is a UO alum and its most important booster.
Nevertheless, like an NBA general manager trying to close the signing of a top draft choice, Nike has offered to pay the university a $3 million signing bonus if it renews.
In this case, Nike proposes upping the royalty it pays to Oregon from 12 to 15 percent on apparel. The university will continue to receive a 5 percent royalty on sales of footwear.
Nike also promised to provide two internships to Oregon students, up from one.