NIKE News ----------- Nike Reaches $252 Million De
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Posted On: 01/14/2016 9:20:41 PM
NIKE News
Nike Reaches $252 Million Deal to Extend Sponsorship at Ohio State -- Update
Source: 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, 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 past 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 completed its renewal in the past 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 completing 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 completed, Ohio State negotiated more favorable terms in its licensing agreement with Nike.
Nike declined to comment.
The exchange between Nike 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 past 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
Corrections & Amplifications
Ohio State will receive at least $103 million in cash, including royalty income, according to terms of its contract with Nike Inc. An earlier version of this article incorrectly said the $103 million didn't include royalty income.
(END) Dow Jones Newswires
January 14, 2016 20:51 ET (01:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Nike Reaches $252 Million Deal to Extend Sponsorship at Ohio State -- Update
Source: 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, 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 past 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 completed its renewal in the past 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 completing 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 completed, Ohio State negotiated more favorable terms in its licensing agreement with Nike.
Nike declined to comment.
The exchange between Nike 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 past 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
Corrections & Amplifications
Ohio State will receive at least $103 million in cash, including royalty income, according to terms of its contract with Nike Inc. An earlier version of this article incorrectly said the $103 million didn't include royalty income.
(END) Dow Jones Newswires
January 14, 2016 20:51 ET (01:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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