Nike, Under Armour and Adidas are among the biggest losers of canceled college football

Will postponement of swing state college football seasons affect fans' voting preferences in November? One pollster says it's a 'game changer' for Trump.

Posted: Aug 17, 2020 11:10 AM
Updated: Aug 17, 2020 11:10 AM

Two of the country's top college football conferences will postpone their fall seasons. That could mean billions of dollars in losses — for universities, college towns and companies built around the American college football spectacle.

Sportswear companies in particular stand to lose out on one of their biggest investments and most lucrative marketing opportunities.

Nike, Adidas and Under Armour sign sponsorship deals sometimes worth hundreds of millions of dollars with universities with strong athletics programs. For the universities, the deals are an important revenue stream; for the companies, they're a key source of brand exposure to both high performance athletes and the broader consumer base.

"If you look at what the overall spend (on college apparel deals) is, I bet it's the companies' biggest expenditure from an advertising standpoint," said Eric Smallwood, president of Apex Marketing Group.

The Big Ten and Pac-12 on Tuesday voted to postpone college football and all other fall sports seasons in light of the potential risks to student athletes during the pandemic. The other members of college football's "Power Five" conferences — the Big 12, SEC and ACC — have stated plans to play football in the fall. Many smaller conferences, which apparel companies also work with (though the deals are less valuable), have also announced plans to postpone fall football.

Some of the most lucrative collegiate apparel deals are with schools in the Big Ten and Pac-12, according to a September 2019 accounting of the biggest deals by Forbes. They include Under Armour's 2016 15-year, $280 million deal with UCLA (which Under Armour is now trying to exit); Nike's 2016 15-year, $173.8 million deal with the University of Michigan; and Adidas' 2018 10-year, $119 million deal with the University of Washington.

During the 2020-21 school year, Michigan is set to receive $5 million in product and more than $4.8 million in cash from Nike, according to its contract, which was obtained by the Portland Business Journal. The deal also includes added bonuses if Michigan, a Big Ten school, plays in championship games, which now won't be happening this fall.

"Nike is synonymous with college football," Smallwood said. "So, it's very crucial for them."

Even the schools that plan to move forward with fall football face serious challenges in carrying out the season safely.

On Saturday, the head football coach at the University of Oklahoma, a Big 12 school, said nine players had tested positive for coronavirus. Last week, a wide receiver at Florida State University (an ACC conference member) accused the school's athletics department of lying about players' health safety conditions related to Covid-19 during the first week of football camp, though the school's athletic director and other athletes pushed back on the claims.

The apparel companies will lose out on merchandise sales and brand exposure during televised games — the companies' logos appear on players' jerseys and shoes and are also often plastered around stadiums.

Smallwood estimates that, on average, a Big Five conference school's regular football season would provide $4.74 million in marketing value to its apparel company through TV brand exposure. A single conference championship game could provide the company with more than $2 million in marketing value.

For both the schools and the apparel companies, missing a season would involve other losses, too.

As part of some collegiate apparel deals, some companies will work with a universities' student athletes to test gear and gather data on its performance. In return, some universities receive guaranteed internships for students or on-campus talks from corporate leaders. Sponsoring college athletics helps the apparel companies build relationships with student athletes, so that if they go pro, they're more likely to endorse and wear that company's gear.

The partnerships can also help build brand loyalty among fans of a college football team.

Most collegiate apparel deals include clauses that allow the companies to penalize the university or pull out of the agreement if players cover up the company logos on their apparel or shoes or if a team is sanctioned by the NCAA and can't play.

In the Michigan contract, the school acknowledges that "a principal inducement for Nike's entrance into this agreement is the exposure that the Nike brand receives through the prominent visibility of the Nike Marks that appear on the side ... of the football shoes worn by members of the football team."

But it's unclear whether the agreements account for a global pandemic that cancels play, or if apparel companies would pull out of the agreements even if they did. Smallwood said if the pandemic continues to push off the football season, or if it begins to encroach on college basketball, the companies may try to renegotiate their deals.

"Under Armour remains committed to defining multiple ways to support athletes, coaches and staff as society navigates the months ahead of us," Under Armour said in a statement to CNN Business. "We are focused on performance solutions for all athletes, regardless of sport, as they work towards accomplishing their training, competition and recovery goals."

Adidas declined to comment for this story. Nike did not return requests for comment.

Terre Haute
Clear
53° wxIcon
Hi: 61° Lo: 38°
Feels Like: 53°
Robinson
Clear
56° wxIcon
Hi: 62° Lo: 38°
Feels Like: 56°
Indianapolis
Partly Cloudy
50° wxIcon
Hi: 58° Lo: 38°
Feels Like: 50°
Rockville
Clear
53° wxIcon
Hi: 60° Lo: 36°
Feels Like: 53°
Mattoon/Charleston
Clear
53° wxIcon
Hi: 61° Lo: 40°
Feels Like: 53°
Terre Haute
Clear
53° wxIcon
Hi: 60° Lo: 37°
Feels Like: 53°
Marshall
Clear
53° wxIcon
Hi: 60° Lo: 37°
Feels Like: 53°
Sunny, but cool.
WTHI Planner
WTHI Temps
WTHI Radar

Latest Video

Image

Wednesday: Sunny, cool and breezy. High: 61

Image

All You Need to Know for Wednesday

Image

The Fight For Raises

Image

Gas prices are up; Here's how you can save

Image

Rose-Hulman AD

Image

Bloomfield volleyball

Image

Linton football

Image

Back On Track Clinic

Image

ISU HOMECOMING BUSINESS FOLLOW UP

Image

Olney Park Trail

WTHI Events

 

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Cases: 1688261

Reported Deaths: 28115
CountyCasesDeaths
Cook63888311249
DuPage1091671385
Will919701133
Lake806751092
Kane68883880
Winnebago41507561
Madison40309602
St. Clair36434602
McHenry35095334
Champaign27178198
Peoria27067370
Sangamon25919287
McLean23203220
Tazewell20751333
Rock Island18988364
Kankakee18036251
Kendall16359115
Macon15402252
LaSalle15119287
Vermilion14564202
Adams13244153
DeKalb12252134
Williamson12126176
Whiteside8351184
Jackson812695
Boone799183
Coles7973128
Ogle763290
Grundy744186
Knox7362169
Franklin7356115
Clinton7149102
Macoupin7035107
Marion6966144
Henry668077
Effingham6678100
Jefferson6604143
Livingston601298
Stephenson592394
Woodford581592
Randolph5578101
Christian538382
Fulton530377
Monroe5278104
Morgan5115100
Logan497375
Montgomery495783
Lee481062
Bureau446291
Saline438169
Perry435975
Fayette434664
Iroquois425577
McDonough378461
Shelby352549
Jersey338553
Lawrence336833
Crawford335330
Douglas330437
Union309448
Wayne307863
White281433
Richland281357
Hancock275135
Clark268040
Cass266931
Pike266458
Edgar261849
Clay261154
Bond258125
Ford247459
Warren245866
Moultrie238733
Carroll237638
Johnson231732
Jo Daviess218429
Massac218151
Wabash217919
Mason214753
Washington213528
De Witt208130
Mercer206437
Greene206040
Piatt204114
Cumberland190726
Menard172913
Jasper162121
Marshall142321
Hamilton134722
Schuyler110210
Brown107110
Pulaski105212
Edwards104218
Stark82128
Gallatin7959
Alexander74512
Scott7146
Henderson71314
Calhoun6952
Hardin61516
Putnam5684
Pope5596
Unassigned1222433
Out of IL190

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Cases: 1012606

Reported Deaths: 16567
CountyCasesDeaths
Marion1360682133
Lake667261170
Allen58341804
Hamilton46545468
St. Joseph44627619
Elkhart36101512
Vanderburgh32358482
Tippecanoe28053261
Johnson25224447
Hendricks23977362
Porter23018367
Madison18848412
Clark18640254
Vigo17562304
Monroe15340199
LaPorte15249252
Delaware15135264
Howard14839292
Kosciusko12433149
Hancock11788177
Bartholomew11712180
Warrick11314188
Floyd11149216
Wayne11036254
Grant10159220
Morgan9512178
Boone8976116
Dubois8291132
Henry8265155
Dearborn824793
Noble8075106
Marshall7995135
Cass7569123
Lawrence7494172
Shelby7236117
Jackson701990
Gibson6621115
Harrison653293
Huntington6456100
Knox6429107
DeKalb6375102
Montgomery6304112
Miami596298
Putnam584879
Clinton579772
Whitley569756
Steuben568677
Jasper537681
Wabash5372104
Jefferson513997
Ripley502587
Adams484876
Daviess4692115
Scott440576
Greene428496
Clay427760
Wells426388
White421365
Decatur4182105
Fayette407587
Jennings390763
Posey377944
LaGrange362779
Washington360551
Randolph348199
Spencer341243
Fountain337060
Sullivan331252
Starke319871
Owen316271
Fulton315868
Orange295564
Jay286446
Franklin266743
Perry265852
Rush264432
Carroll262534
Vermillion260554
Parke232429
Pike229744
Tipton229359
Blackford195143
Pulaski184757
Newton160448
Crawford160226
Benton151417
Brown147547
Martin139819
Switzerland135611
Warren121416
Union107316
Ohio85013
Unassigned0545