The past few days have been dominated with major free agent signings. NBA players moving cities and changing the balance of conferences, handshake agreements, renegotiation and second thoughts have all altered the landscape of pro basketball. Lost amidst this shuffling are other free agent moves that have just as long-range consequences as where players take their talents. These other transactions often take place behind the scenes, deal with tens of millions of dollars, and are about to see their values explode.
The highly competitive market for exclusive apparel contracts with universities is hitting all-time high marks right now. Recruits, armed with social media that allows for constant review of styles and trends, are more and more heavily swayed by what brand they’ll get to wear on game day. Schools certainly know this as do the apparel providers, and with Michigan’s transition from Adidas to Nike last week, it would seem the domino-fall of other universities gouging deeper into companies’ pockets has only just begun.
Just as athletes use their peers’ contracts as measuring sticks when determining their own future deals, so too will Texas look to the recent Michigan contract when deciding what brand it will wear for the coming seasons. The decision will help fund Texas athletics for millions of dollars. This past season Nike paid Texas $3.6 million to have the swoosh on Longhorn gear; that number will possibly double for the next contract UT signs, regardless of the company. For the sake of context, schools like FSU and Ohio State each command over $4 million each year from Nike, but are not in contract years for their loyalty. Retaining or signing the Longhorns will surely come at a dear price.
Look for the Michigan and UT deals to also set the stage for other universities with expiring apparel contracts. South Carolina, Michigan State, and Wisconsin will certainly be keeping an eye on the Texas negotiations, for as the costs of scholarships continues to rise university athletic departments will need to squeeze massive corporations like Adidas and Nike for every dollar they can get.
While millions of dollars is nothing to take lightly, the impact of being associated with a desirable brand for the sake of recruiting could be an even larger component of schools’ decisionmaking. Choose a waning or unpopular brand and a school could be saddled for years with the difficult (albeit admittedly superficial) hurdle of seeming uncool to graduating high schoolers. If two recruits go to a rival each year because they’re brand loyal to Nike or Adidas, that can be the difference on the scoreboard. And with the increased presence of social media and sports business reporting, kids are more and more aware what they’re favorite players and teams wear; for a five-star recruit wavering between two schools, it would be foolish to think apparel branding couldn’t be a swing factor.
The importance of choosing wisely in terms of apparel providers for a university is increasing rapidly. Monetarily, universities are commanding more and more for their allegiance; apparel contracts are rare opportunities to dig deeply into the substantial coffers of suitors looking for exposure and affiliation with tastemaking institutions in key demographics. Potentially missing out on millions of dollars is a mistake no athletic department wants to make. However, even more costly could be choosing a brand that is unappealing to the recruits who can make a team successful on the field or court. While not significant to every incoming student athlete, the logo on a school’s jersey or shoes, if it is the wrong one, can have an impact on the decisionmaking of young recruits.
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