Take a look at the top annual collegiate athletic apparel contracts and you’ll notice a recurring theme. It’s dominated by three players: Nike, Under Armour and adidas (including subsidiary Reebok, which was purchased in 2006 for $3.8 billion). Though collegiate athletic apparel contracts can be lucrative, they pale in comparison to the pros. However, securing the bigger programs such as Texas, USC and Notre Dame – especially when they’re winning – can be a profitable alternative to deals with the professional leagues.
Each manufacturer has a diversified portfolio of different schools and leagues. So where does each company stand?
Nike started the trend of alternate uniforms when it began churning out new designs for Oregon. With Oregon now a perennial winner, the Oregonian manufacturer is getting unprecedented national exposure. However, with all that publicity, Nike retains only the sixth and 10th most expensive deals in college football, with Florida State and LSU, respectively.
But it’s doubtful Nike is concerned about being unable to crack the top five in the NCAA. Nike replaced Reebok as the NFL’s licensed-apparel maker in 2010 via a five-year contract with an estimated value between $1 billion and $1.5 billion. In exchange, Nike is getting the brand recognition of being associated with the biggest sport in America as well as upwards of $500 million in revenue per year, something even the biggest collegiate programs can’t offer.
Under Armour made a big commitment to the NCAA when it announced a record-breaking 10-year deal with Notre Dame worth $90 million. The potential for the Baltimore-based company is staggering, especially considering Notre Dame’s national exposure. The Fighting Irish are the third-ranked school in terms of merchandise sales, a big boost for a company whose next-highest school is South Carolina at 16.
Of the big three, Under Armour is the only manufacturer without an exclusive deal with any of the major professional domestic sports, including MLS, which probably explains its hefty NCAA bets. However, look for Under Armour to compete for the next league deal when the NHL’s contract with adidas/Reebok expires after the 2016-2017 season.
adidas has made a name for itself in both collegiate and the professional sports with five of the 10 biggest collegiate deals, including four of the top five. The German manufacturer also boasts exclusive deals with the NBA ($36 million/year, expiring in 2017), the NHL through subsidiary Reebok ($50 million/year, expiring in 2017), and even the MLS ($25 million/year, expiring in 2018).
However, Reebok has struggled under the adidas umbrella, and the parent company raised eyebrows when it attempted to phase out Reebok’s disjointed NHL branding for the adidas logo. In addition, adidas is limited in its NBA exposure because it’s prohibited from placing its logo on NBA game jerseys.
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