UCLA and Under Armour Agree to Record Deal

It’s the best of times for the athletic department at the University of California-Los Angeles. UCLA and Under Armour have agreed to a deal that will put Bruins athletics on top of the NCAA revenue pile.

The length of the contract for apparel rights between the two parties, 15 years, is nothing remarkable. The University of Texas and Ohio State University both have 15-year deals with Nike.

The value of the deal is something else, however. UCLA will get a total of $280 million over the length of the deal, which is a new record for NCAA institutions. The previous record was $252 million, the value of the aforementioned contract between Nike and Ohio State.

That $280 million valuation isn’t all cash for UCLA, of course. UCLA gets $15 million in cash as a “signing bonus,” then $11 million in cash per year for the next 14 years. Another $7.4 million per year will come in the form of clothing, equipment and shoes. Finally, there will be another $2 million in cash for the next eight years earmarked for facilities upgrades.

While Under Armour will provide all of the apparel for UCLA’s student-athletes and handle production of fan apparel, UCLA will retain its rights to determine the appearance of their teams’ apparel. Under Armour gets to design fan gear, and it’s possible that Under Armour could design an alternate football uniform according to David Wharton of the Los Angeles Times.

There are three big takeaways from this development:

  1. As the values of these contracts continue to escalate, it’s going to become more and more difficult for institutions, which are the recipients of these funds, to continue to deny any form of compensation to student-athletes, at least in the public eye. It’s difficult to argue that you are a non-profit organization and amateurism is of paramount importance when you have a sponsorship deal worth more than the revenue that 20 Major League Baseball teams brought in last season.
  2. This couldn’t have come at a better time for the Pac-12. The conference has been concerned about keeping pace with the Big 10 and SEC in revenue, and this helps to quell those fears.
  3. Under Armour has showed us that they are considering geography in their strategy. With Cal already under contract as well, the west coast appears to be where their focus is.

Perhaps the biggest question on people’s minds, however, should be how soon after this we will see a $300 million apparel deal?

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