Michigan's deal with Nike worth $169 million, $79 million more than any other school

Michigan's deal with Nike worth $169 million, $79 million more than any other school

Michigan's deal with Nike worth $169 million, $79 million more than any other school Buy this photo
Illustration by Francesca Kielb
Wednesday, July 29, 2015 - 9:28pm

One week after announcing that it had <a href="https://www.michigandaily.com/sports/michigan-inks-deal-nike-through-202... to a record-high apparel deal</a> 
with Nike, the Michigan Athletic Department released details this morning about the overwhelmingly popular contract.

The highlight of the agreement is that Michigan will receive $169 million over the duration of the 15-year contract, including $76.8 million in cash alone, $12 million in upfront money and $80.2 million in apparel.

The deal blows past the 10-year, $90 million contract Notre Dame signed with Under Armour earlier this year as the largest in the country. But with Adidas, Under Armour and Nike all offering similar amounts of money, cash was only one step of the five-month process that saw Nike emerge as the obvious choice.

"This decision, this partnership is about more than Michigan athletics," said Interim Athletic Director Jim Hackett. "At the core, it is about our University community and it is about two great names reuniting for an opportunity that speaks to more than uniforms and apparel."

Michigan football, men's basketball and women's basketball were listed as the three flagship sports in the deal, while baseball, hockey and softball will continue to have equipment provided from third parties. In total 11 sports will continue to use their current equipment providers, so long as that provider isn't Adidas, Under Armour, Reebok or Puma.

Also included in the deal are plans to expand the partnership beyond apparel. The initial agreement includes an obligation for Nike to hire at least three summer interns from the University each year at $15,000 per student, and two community events to be hosted in Ann Arbor each year. 

According to the Term Sheet, Michigan and Nike also have a "shared interest and goal of improving working conditions in the subcontracted factories used to make (Nike) product." This clause is largely in response to community outcry in the past over Nike's reputation for low-wage sweatshops.

Mentioned in another segment of the Term Sheet released Wednesday are tentative but unspecified plans for Michigan and Nike to collaborate in "furthering research and innovation in regards to sport performance and (environmental) sustainability." Language was included in the contract to include Michigan's Recreational Sports Department in such collaborations.

“The University of Michigan ranks high among the world's great institutions of higher learning and enjoys a rich, tradition-laden history in college sports,” said Joaquin Hidalgo, Vice President and General Manager, Nike North America in last week's announcement. “We eagerly look forward to bringing out the best in each other.”

In addition to shattering the record for the largest deal in NCAA history, Michigan will also receive 15-percent royalty rates on apparel purchases. This exceeds the 10-percent Michigan currently receives in its deal with Adidas, passes Notre Dame's 13-percent and is believed to be the highest in the country