Michigan

Michigan and Nike finalize big time apparel contract

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Michigan

Nike and the University of Michigan finalized their massive agreement today that’ll mark a new era for the school’s athletic program beginning this August.

According to reports, the contract between Michigan and Nike is believed to total up $173.8 million dollars if a four year extension period is put into effect after the initial 11-years of the deal.

Here’s Mark Snyder with the Detroit Free Press with a breakdown:

The 11-year term is worth $127.12 million — $53.52 million in cash payments, $56.8 million in apparel and a $12-million signing bonus/initial payment that was scheduled to be paid 10 days after the contract was signed March 16. There also is an option for U-M to order an additional $4.8 million in apparel not included in the yearly totals.

Other terms of the deal according to Snyder include:

 There are performance bonuses for the football, men’s basketball and women’s basketball teams. The football team’s range from $100,000 for winning the national championship to $10,000 for reaching the Big Ten title game. The basketball team’s top bonus is $25,000 for winning the national title. The women’s team can earn up to $7,500 for winning the national title.

Nike will pay U-M a royalty of 15% of net sales on non-footwear apparel and 5% on footwear. U-M will receive no less than $18.37 million in royalties over the 11-year term (or $25.05 million in the 15-year deal).

Use of the Jumpman brand for basketball and football, which will make U-M the first Jumpman football program in the country.

Additionally, three internships will be available to University of Michigan students at the Nike headquarters, Nike can extend the contract with Michigan should the school endure any type of sanction or punishment from the NCAA that results in a loss of scholarships or postseason ban while other olympic sports at the University will be able to continue their apparel deals with third party vendors.

Big business is alive and well in college athletics.

You can view the full contract here.

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