UW Huskies leave from Nike, and agree to $119 million apparel deal, across 10 years, with Adidas.
The University of Washington athletic department has agreed to a 10-year deal with Adidas worth almost $12 million annually, making it one of the richest apparel deals in college athletics, The Seattle Times has learned.
The new deal ends the Huskies' 20-year partnership with Nike, which has been paying UW about $3.5 million annually in product and cash over the past decade.
This deal is the 6th highest paying college sports apparel deal, behind UCLA, OSU, Texas, Louisville, and Nebraska (per the side bar on the article).
Here is a list of the 2016 top 65 highest paying college sports apparel deals - You'll see that VT is 62nd with $1.88 Million annually.
Comments
I certainly hope we shop around. We should have an apparel deal that is top-25 in value.
An apparel deal worth half that much would put the athletic in the black by ~$2 Million.
Yep, but Jim Weaver was working part time from home and told some underling to simply extend our current deal- which was below market value to begin with for - oh, I dunno, how about 10 years? nice round number, sign it. HUGE gaff.. huge. The frustrating thing is the logic. "Frank Beamer loves Nike" "Nike has been good to VT" (yeah), "Basketball CANT leave Nike, no matter what, we won't get any good players".. Yes, that's how I would run a business- give your supplier EVERY card in the negotiation, AND show your hand publicly. That's why our deal sucks. Hopefully Whit has the stones to actually negotiate with them and others in FOUR years when our deal is finally up.
Thank you for your included emphasis so I know how furious I should be over such an enormous mistake.
Obligatory
It actually manages to get more embarrassing every time I see this.
The dagger in the stomach comes when you see that GT is getting more.
Boston College......
Wake F'n Forest???? That hurts!
GT is switching to Adidas starting next season. Don't know what that deal is worth though.
The answer is more.
A lot more, Brotato Chip.
Even more, Brofessor
Yes...Paul Johnson and his Amish offense are making more from RUSSELL ATHLETIC than we get from Nike.
Let that marinade.
It has marinated, and
This is utterly embarrassing and inexcusable.
Oof, loluva almost doubles us. I did not know Nike made polo and croquet gear
Even worse that deal doesn't even cover all their sports. They have sports with their own deals.
I say we all call up Big Baller Brand. /s
Well our deal does expire in '22, so at least we can hope it gets there in time...probably not though
If VT doesn't get out of the deal before 2022, that'll be a huge mistake by somebody.
Wait, what?
BBB took a notoriously long time to get their shoes shipped something like 6 months behind scheduled delivery.
Seriously, fuck Nike. I like their apparel the best, but I like making money hand over fist more. Just like TV deals and conference realignments, it seems advantageous to strike early while the getting is still good otherwise you find yourself dipping a dry well. Adidas' cheapest deal since 2015 is still over twice as much as our deal. We should sniff at least $4m/yr. We are a bigger brand than Miami, Louisville, Indiana, Kansas, NC State, and Miss State and deserve to be paid at least what they make.
Citation: https://graphics.wsj.com/table/COUNT_09212017
pump the brakes on bigger brand than Miami, NC State, Louisville. Miami has every front runner in america. the other schools have established talent in other sports.
To add on the if the deals are for the entire athletic department, Kansas and Indiana are basketball institutions.
For football I would agree we are a bigger brand than NC State and Louisville. Up until the slide we were rivaling Miami as a football brand.
It would be interesting to see apparel sales. Just seems like Miami always had a dichotomy of sorts with a Dallas Cowboys like national following, but couldn't fill up a stadium in Miami.
If the WSJ values are accurate, then we would be around the Florida/UVa mark on the endorsement deal chart and clocking in at around $3.3MM/yr.
I'd say send the link on over to Whit, but I'm sure he's already aware of it.
Our deal is pathetic.
It's my understanding that it was negotiated by Weaver, but Whit signed it, so yeah.
EDIT: TSL has a good recap here. https://virginiatech.sportswar.com/article/2016/05/25/virginia-techs-nik...
It seems unclear if it was negotiated by Weaver, but in Whit's opinion, it was essentially a done deal when he started. Disappointing
Do we really need to do this to ourselves every time a new college gets a better deal then ours? I know how this story ends.
Our deal is so bad, I wonder if there is a buyout clause? I can't imagine it would be much ($1.88m x 4 years is only $7.5m...and that's just based on what they're paying us. Can't imagine they could claim losses for much more than that).
You can't hold someone to a contract for an unconscionable amount. So, no matter what the early termination clause is, it would probably be covered by income generated in less than a year of a new contract similar to UW.
I'd be interested to hear what the actual number is because until then talking about buying it out is just posturing. As far as I see it the two options that Virginia Tech has right now are to renegotiate the contract with Nike to get more money but extend it a few more years or to ride it out and shop around at the end of the contract.
Buying it out would only be smart with a better offer in hand and it depends on how important immediate cash flow is to the department, but depending on numbers and strategy it could make sense.
via GIPHY
Our deal is bad, but if I were Whit I would be waiting until ACC network kicks off and then renegotiate. We will get a lot more once our market is expanded by this and thus have significantly more leverage. Use a renegotiation with NIke to drive up Adidas or Under Armor. There's no point to renegotiate until that time.
Because the start date is already known (i.e., 2019), any leverage that would exist with having ACC network can be realized immediately. I don't think there is enough uncertainty to really make a great difference between now and then.
no way. disagree completely. the network starting is great for us and the projections of returns look good. But the reality of the network driving numbers up will hold MUCH more weight. Money in is worth more than money promised.
While unlikely, it could also go the other way if the network sucks and subscriptions are less than predicted. Being honest, I don't see the ACC network having the same success and I think its due to conference membership. As a die hard fan of an ACC school, I would still rather watch other SEC and Big10 teams play than teams from our conference not names Clemson or FSU.
Maybe the new network will help with this, but I don't think the ACC will ever have the allure in football that the SEC/Big10 have. I think basketball will have to be what carries the network and basketball just isn't as big of a market as football.
I could be completely wrong but I'd be interested to know how many TKPers actually plan on subscribing to the ACC network once it launches.
You're right about the possibility of the pendulum swinging in the wrong direction, but so far football and basketball seem to be projecting well. So initial numbers look good.
If inherent numbers are good, then why not make a deal on it?
There is always an inherent risk when projecting the future on both sides of a negotiation. Even with some data point of numbers after the ACC network is started, the future is still speculation.
If the other side (e.g. Adidas) underestimates projections at this time point, then it is better to wait for actual data points to show that their projections were in fact an understatement and VT deserves better. If their projections are in line with VT (which is why a contract is formed, mutual assent), or you provide them with expected projections and they agree, then there is no point in waiting.
Idk, that just seems to be the way I would negotiate as I was taught, but alternative strategies do exist. But, I really don't think waiting is a strong strategy if there are enough projections to accurately predict the effect of the ACC network. These projections seem healthy and robust enough to make the deal now.
Why would they simply agree?
Sure they want the contract and are willing to pay for it, but that doesn't mean they won't be negotiating hard on their side to get a better deal. I been through enough buyouts to know I wouldn't do that. If you presented me with projections, which may in fact be lower than projections that we run internally on our side, I would still negotiate you down on the fact that those have not been proven yet. If I was handling the contracting it would be my job to do that.
And I guess the point no one is really touching on is that VT's bad contract is also due to how poorly its apparel does in the market place. VT waiting for real data points will result in a much higher net gain because it will have better active metrics. The only reason I see to do it prematurely is if VT feels the network will not reach its projections.
The opposing wouldn't simply agree. They would agree because they've reached mutual assent to form a contract. Agreement to a full contract, as it almost always does with sophisticated parties, would take significant time.
I would hope that the other party would perform their own due diligence, but if VT is not providing their data and expectations of what is at stake, that's a terrible negotiating tactic on their part. VT should be the party that provides this data as it would be a negotiating point that should garner more in return. UA/Adidas should confirm their projections in their own due diligence.
Eh, buyouts are different than commercial apparel contracts. Unless you're considering the buying out of Nike's contract a buyout. If so, then the new company wouldn't be negotiating that anyways.
Future projections are never proven until they actually have happened. One cannot contract the past, only the future. The data analysis relied upon, however, should be robust.
In addition, if the contract is heavily dependent on how the ACC network provides exposure, UA/Adidas can put in terms that mitigate certain aspects. For instance, Adidas/UA could require that X amount of exposure on the ACC network is required to receive a certain amount of compensation. You can tier it in many ways, based on expectations and due diligence results on both sides.
If this is the overarching concern (and I have no reason to agree or disagree), then I don't really see how waiting would benefit, unless VT is in such a bad place that their projections have no sway and will need some miracle from the ACC network to prove their worth.
I really doubt that VT is ranked in the 60s in apparel sales or much less than UW. Anecdotally, I see more VT gear than UW here in Cali and the Pac-12 fans I know seem much more apathetic (excepting USC fans). Data on apparel sales would be really interesting to see .
We're going to disagree on this. I suppose because we are approaching it from different perspectives, me from business and you from a legal I believe (unless I am mistaken). my last point on this so it's not too much of a thread tangent.
to reach mutual assent that value needs to be mutually agreeable. I believe VT will get more when data sets from an actual operating network are real, you believe projections are enough. I would never and have never agreed to give full value for any business based on projections alone, and would never advise anyone to either. But that's me.
buyouts are about assets and projection of future returns to establish a value. Take away the assets and buyouts are quite similar to negotiating a value to anything that is based on projected returns.
correct, and a future that is projected prior to any performance is less valuable than a future projected on past performance, so long as both trends are positive.
mitigating clauses would go both ways so moot really.
real world example:
I have a company now that has a licensing contract of a million a year currently. it was based on a market analysis and the company's future projections. Next year, after having had quite a successful year, what do you know, we will be able to license that out at a much higher value, nearly 3 times that amount. why? because actual real data proves it is more valuable. Our market projects haven't changed, but it's real now so we have more leverage to ask for a higher value.
yes, you can contract now. yes, both companies will perform their own due diligence. But, so long as the network is a success, VT will get more money after the network starts than before.
happy to disagree on that though.
I was going to write a longer response, but I'll just conclude with this:
VT is in a really bad contract currently and conservatively should be able to at least triple or quadruple their apparel deal based on contracts to similar Universities (and without considering ACC network). Waiting for the ACC network to begin to get further data seems minor considering a robust projection can be made.
No worries man. you are not wrong, I just disagree.
Either way we both agree VT contract bad and network should get us much better one.
Leg for the convo
True, always enjoy the discussion.
So, am I reading this right? Did you just admit that you are wrong?
He's not wrong. I just believe my way is better.
Just different philosophies.
Timing is a critical factor any deal. That much we do agree on for sure.
If a digital-only subscription is available, I most likely would sign up.
Soo..... o/
For those clamoring for jumping ship to Adidas or Under Armor, just realize that that would probably lose us our basketball coach. From what I've seen on the interwebs (no sauces, here), he's a Nike guy.
Just sayin', we should consider any repercussions.
I love Nike's products just as much as the next guy, but if (insert different clothing company) ponied up (insert considerably more money than currently receiving), I think I could change my allegiances. But maybe he's not near as fickle on his clothing tags as I.
Probably not an issue of what Buzz likes to wear, brands are huge in basketball recruiting. If he's made his network and connection through Nike camps, coaches, etc, it would take a significant amount of time and effort to rebuild that network.
Perhaps we could afford to pay him better if we switched brands.
Looking at the deals a lot of other schools have makes me think our best option would be negotiating to extend the contract in exchange for doubling our money or so. Something north of $3 million seems appropriate for a program of our caliber signed with Nike.
It would be foolish not too. Buzz is bright and has shown that he understands money management, contract negotiations, team building, etc.
I'm sure he understands if the money gained from an Adidas/UA deal outweighs the losses of a Nike deal, then do it. If not, then don't. Of course, if the money gained is overall better for the Athletic dept but ends up a detriment to the basketball team, then Buzz may leave. That's kinda how cost/benefit negotiations work.
Leaving Nike might cause Buzz to leave yet the board just had a discussion about the possibility that Buzz might leave VT for Texas A&M... which is an Adidas school.
You can't make this stuff up. While I'm not saying Buzz will stay for life, fans spend way too much effort seeing the worst in every situation.
I don't think anyone who posts here regularly gave that rumor the time of day.
The Nike/Buzz thing is real, but that's only because he wants Nike AAU guys. There are more of them, and thus a better pool to recruit from. VT is not a basketball brand like Kansas or Louisville that don't need Nike, and even still GET Nike AAU guys regardless. The issue with this is two fold. 1. Nike doesn't do anything for VT hoops in terms of juice/marketing/apparel- nothing. Our uniform design is 5 years old, you can't buy a VT current jersey anywhere - including campus, and we don't get special shoes/promotions/anything from them simply because Buzz is our coach. 2. "Nike" is not funneling top AAU players to VT anyway. They only really use their influence to funnel 1 and done types to old school huge "Nike" Coaches- the list is short. Coach K, Beoheim, Roy, Calipari, Izzo. That's it. So yeah, the whole dynamic with Nike and VT hoops is very overrated. If Buzz is John Wooden reincarnate and Nike is a "must", sign a hoops only brand Jordan deal like Marquette had, and sign UA or Addidas to the other sports for millions more than Nike's pennies... done.
From Nike's perspective, why would they funnel money and players into VT basketball? We're a bad brand, and the only reason we are even somewhat decent right now is because of Buzz. We haven't shown even the remote possibility of long term sustainability, so from their perspective, any money put into us is just tossing stacks of $100s into a lit fireplace. If we want that kind of treatment, the onus is on us to go out and legitimately earn it. Go out and be a Top 20 program for at least 3 of the next 5 and make 2 Elite 8 runs over the same period. Put ourselves as a Top 4 seed multiple times in the NCAA Tournament. Make it worth Nike's while to pimp us out. But the fact is, we're not that. We're a program that was happy to make the NIT 2 years ago, as it represented a huge step for us going forward. Why would they care about that?
If you want to talk football, that's a different story. They absolutely should be doing more for us in football, and should be treating us as at the absolute worst, the major football brand of the Mid-Atlantic region. But we're largely ignored. We should be able to leverage our football prestige to a better deal, and we should be able to do that whenever we want. Just because Weaver locked us into a terrible contract doesn't mean we have to sit back and ride it out. We should be actively searching for something better, and then using that leverage to sweeten our Nike agreement.
Agree with the last part 100%.. as for your first point, yep that is true too, thus if we dumped Nike, what would we loose? Buzz would be pissed and leave? OK, Whit has more consumers and responsibility than just Buzz though. He literally could get 5-6 million more PER YEAR than we are getting now. Give some of that to Buzz to sweeten the pot and tell him to go recruit 3-4 star guys that don't mind wearing UA.
The problem is finding those recruits who do want to wear UA or Adidas. I just did a little research and found that, since 2002, Nike has been worn by 78% (53 of 68) of the teams in the Final Four, having been the outfitter of champions 14 of the past 17 years. Adidas, the second most, has been worn by only 19% (13 of 68) of those teams, and the remaining 3 National Champions. Keep in mind, that number actually falls to 11 of 68 and only 2 NC when you consider that UofL vacated 2012 and 2013 because of Adidas being inherently involved with their recruiting, paying for kids to go to their schools. The remaining 2 Final Four trips were outfitted by UnderArmor (SCar in 2017) and Russell (Georgia Tech in 2004).
Recruits know this. They know the best teams wear Nike and they want to be a part of that. And for those few who would prefer Adidas, you're recruiting against Kansas, UCLA, Wisconsin, and UofL. Good luck with that.
So yeah, there is something to be said for sticking with Nike, even if that means taking a little less money to do so. Recruits legitimately gravitate toward Nike schools.
I'm perfectly OK with a "little less money". That's not remotely the case though.
Replica tech basketball jerseys have been available for the past two seasons.
Not with the hokie stone pattern on the back.. i.e. the "current" jersey. I have looked everywhere and asked Alumni Hall, CE, and Tech bookstore. Nope. The only ones they had are the old template.
You're only going to find authentic replicas for a handful of Nike schools. They don't even sell the UVA jersey with the rotunda on the back.
Well that's because they are the first 1 seed to.....
(If only I knew how [or had the tools at work] to add text to an animated gif at specific times, I would've done a better job at this one.)
I think we're on the same page. I can easily buy that Buzz prefers Nike for recruiting purposes but wanted to point out the contradiction of "Buzz is about to leave us" for an adidas school speculation with the "Buzz is about to leave us" if we aren't a Nike school thought. A Nike for hoops-only deal seems like a reasonable compromise if necessary.
I would also point out that Buzz has an extremely coach-friendly contact that might be hard to obtain at a P5 school not as desperate as we were or with more basketball prestige. While I believe Buzz will continue to have success if he stays at VT and hope that he does stay, it's much better for him to leave VT than the alternative if a parting of ways does occur. With a higher paying apparel deal, VT might be able to sweeten the pot financially to attract another quality coach rather than having to make as many concessions in the contract (even though Whit really stretched the budget to hire Buzz in addition to the other concessions).
Here's what Adidas might look like.
I think this would take me a reaaaaal long time to get used to...
Take off the incorrect font high school "Hokies" on the front, and they are fine. Especially for 120 mil over 10 years.
There's only so much you can do on the website. I was leaning on last year's Orange Effect jersey as a template.
That would've been 10 times better then what we ended up with
I would put us somewhere between Miami and Louisville on that chart. You can see that higher dollar values are also associated with more recent years. One gauge I would use is who can we beat/match in recruiting on a regular basis. I know recruiting alone is not a measure of brand value but it can certainly help. I know there are some perceivable bigger brands below Louisville and Miami but again that could be when the deal was negotiated and who negotiated it. Nike is perfectly happy with any big brand taking way less money. Adidas and Under Armor getting into the game forces Nike's hand as well. It's 2018 now. The deal ends in 2022. In those four years if we make a CFP appearance I assure you our leverage will be higher. If you have confidence in the coaching staff (as I'm sure Whit does) you ride out the deal and give them more time to improve the product on the field.