Under Armor Trying to End Its $280 Million Deal with UCLA

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Ignatius L Hoops

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ftw.usatoday.com

Why Under Armour is trying to end its record $280 million apparel deal with UCLA

Welcome to FTW Explains: A guide to catching up on and better understanding stuff going on in the world. You may have noticed people on the internet talking about Under Armour and UCLA on Saturday because the athletic apparel company is trying to back out of its massive
ftw.usatoday.com


You may have noticed people on the internet talking about Under Armour and UCLA on Saturday because the athletic apparel company is trying to back out of its massive apparel deal with the Bruins.

But even though Under Armour and UCLA were trending together throughout the day, you may still have some questions about what exactly is going on, what it means and what people think about it. That’s OK because we’re here to help break down what’s going on here.

A reminder: Under Armour’s $280 million deal with UCLA
Back in May of 2016, Under Armour and UCLA announced a 15-year apparel and shoe deal worth $280 million, marking the largest apparel deal in the history of the NCAA.
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But now Under Armour wants out?
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Yes. In a statement Saturday, Under Armour told the Bruins that it wants to terminate the apparel deal because it says the school is not living up to its end of the agreement and providing unspecified marketing benefits “for an extended period of time.”
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Ignatius L Hoops said:
ftw.usatoday.com

Why Under Armour is trying to end its record $280 million apparel deal with UCLA

Welcome to FTW Explains: A guide to catching up on and better understanding stuff going on in the world. You may have noticed people on the internet talking about Under Armour and UCLA on Saturday because the athletic apparel company is trying to back out of its massive
ftw.usatoday.com

When I was growing up UCLA seemed on par with USC, maybe slightly below, but a force in football (Terry Donahue era and for a few years after). UCLA seems completely irrelevant and been dormant for some time.

We sometimes cite Nebraska falling apart the last 20 years as being similar to the horrible Gopher post 1962 Rose Bowl era, but I think UCLA is a better comparison to the "wandering in the desert" Gopher era Wren used to reference.

Of course UCLA has hired bigger name coaches (who mostly had Mason like results) and had a little success here or there, but has done little for a very long time. Being marooned in a far away, somehwat decaying, half empty Rose Bowl Stadium, far from their campus, in some ways is worse than the Metrodome era. Sure it is the Rose Bowl, but it is not much of a home advantage for them.

In the old days USC and UCLA shared the LA Coliseum. That may have been a better arrangement, but that ship has sailed now that USC has control of the renovated LAC. Maybe UCLA can play in the new Rams stadium, Pasadena fells like it is 50 miles away, even if it is not. Being a big program in a larger metro area is pretty tough sometimes, if you don't have Pete Carrol as HC and plenty of boosters handing out goodies.

We will see what Washington does post HC Peterson, but Minnesota seems better positioned than most of the "big city' P5 teams right now.
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Seems like neither UCLA or USC has done much. And wonder if SoCal top prospects have that same -itis syndrome that effects top rated Minnesota kids: they want to get away from home ?
 

Things have changed for the PAC-12 since their heyday in the 20th Century.
 


UCLA has underperformed in football and men's basketball, but they were lagging when UA signed the deal as well. So now they want out?

The elephant in the room is that if CFB/CBB isn't played or loses popularity and exposure via the pandemic, a hard-hit retailer doesn't want to shell out its slashed and scarce marketing budget on a waste.

This is the first of many upcoming down-rounds for advertising supported business models, CFB included.
 

MplsGopher said:
Seems like neither UCLA or USC has done much. And wonder if SoCal top prospects have that same -itis syndrome that effects top rated Minnesota kids: they want to get away from home ?
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I don't know about USC and home grown talent but they've recruited well ... while sucking or being so-so / far from their glory years ... and only recently have seen crooting quality drop.

That name brand can last a LONG time for some schools it seems, even while hordes of high ranked talent goes there and effectively fall off the map.
 

fmlizard said:
UCLA has underperformed in football and men's basketball, but they were lagging when UA signed the deal as well. So now they want out?

The elephant in the room is that if CFB/CBB isn't played or loses popularity and exposure via the pandemic, a hard-hit retailer doesn't want to shell out its slashed and scarce marketing budget on a waste.

This is the first of many upcoming down-rounds for advertising supported business models, CFB included.
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UA is suffering because of the pandemic, like many businesses. That's the main reason why they don't want to spend the cash.

Advertising/marketing is a core lifeblood of business. That will never go away. The format changes with technology, sure.

But I don't foresee people not wearing clothes, any time soon.
 

MplsGopher said:
UA is suffering because of the pandemic, like many businesses. That's the main reason why they don't want to spend the cash.

Advertising/marketing is a core lifeblood of business. That will never go away. The format changes with technology, sure.

But I don't foresee people not wearing clothes, any time soon.
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UA also had that sort of meteoric rise where they had some good gear / were out competing the other big brands when it came to actual technology... and became a big brand themselves and then sort of faded after Nike and everyone else came up with similar athletic gear.

I wonder what their finances are like beyond just selling apparel woes. Sometimes huge success like that gets folks in trouble with loans and expansion, etc.

UAs effort here might be as much of a warning shot "hey we're not paying one way or another... so lets make a deal."
 



A_Slab_of_Bacon said:
UA also had that sort of meteoric rise where they had some good gear / were out competing the other big brands when it came to actual technology... and became a big brand themselves and then sort of faded after Nike and everyone else came up with similar athletic gear.

I wonder what their finances are like beyond just selling apparel woes. Sometimes huge success like that gets folks in trouble with loans and expansion, etc.

UAs effort here might be as much of a warning shot "hey we're not paying one way or another... so lets make a deal."
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All good points. Last in particular, perhaps they tried to mediate things out privately and UCLA stonewalled? Wild guess.

UA came out of nowhere and I think basically convinced every high level athlete that they needed to be wearing spandex underwear. The tech had been there. Incredible marketing effort.

I still remember the "We Must Protect. This. House." campaign from, what, like 15 years ago now? Crazy how time flies.

And yes absolutely correct, now Nike has all the same stuff. In this country, it's Nike and everyone else, same as always. But UA I think is as big as any other now, in the "others" group. I'd personally rather see a school in UA branded gear, than Adidas. At least it's an American company. No surprise, traitor skunks to the east rocked Adidas for years.
 


My personal taste in the major sports brands:
1. Nike
2. Adidas (would take Adidas over Nike if it's soccer-related though)
3. Target brand
4. Amazon Basics
5. Under Armour

(3 and 4 are tongue in cheek by the way)
 

UA has an awesome market with project Rock and makes a boat load off of that.
 



MplsGopher said:
UA is suffering because of the pandemic, like many businesses. That's the main reason why they don't want to spend the cash.

Advertising/marketing is a core lifeblood of business. That will never go away. The format changes with technology, sure.

But I don't foresee people not wearing clothes, any time soon.
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UA’s stock has been halved since March. It went from $16 to $8.
 

UA made the lightest soccer cleats 6 years ago. I'm not sure if that is the case now. My daughter played Club and ODP in Iowa until she blew out her knee. And we got her a new pair of UA every year. Iowa ODP recommended them and the uniforms were Nike.
 

UA also tried to make inroads into the hunting/fishing/sportsman realm.

Like, if you've got performance spandex on, for sure you will shoot more straight or cast longer. :sneaky:
 

Cedar Rapids Gopher said:
UA made the lightest soccer cleats 6 years ago. I'm not sure if that is the case now. My daughter played Club and ODP in Iowa until she blew out her knee. And we got her a new pair of UA every year. Iowa ODP recommended them and the uniforms were Nike.
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Sorry to hear about your daughter's knee.

Have no idea if this has any truth to it, but thought I read one time that women's knees have evolved to bear the weight of pregnancy, which is mainly front-to-back type stress. So their knees are weaker against side-to-side type stress, and hence more likely to tear ACL in soccer, basketball, fast action/change of direction sports.
 

Great UnderArmor story: my cousin was an offensive lineman at Maryland in the early '90s, and went on to play for a decade in the CFL. His roomate was Kevin Plank, the founder and CEO of UnderArmor. Because my cousin was making pretty good money in the CFL (although nowhere close to NFL money), Plank asked him for a $75,000 loan in exchange for 49.5% of the company. My cousin turned him down, mostly because $75k was a lot of money and his football career could end at any time, so giving that much cash to a guy selling shirts out of his garage wasn't the investment he was willing to make. Of course that investment would've been worth billions today, but he long ago found peace with it. He and Plank remain best friends, but he says Plank has given him shit about his bad business instincts for years now.
 

www.californiagoldenblogs.com

Cal to Under Armour: "You do not have grounds for termination"

The fight continues from the weekend
www.californiagoldenblogs.com www.californiagoldenblogs.com

Also, Cal is fighting Under Armour's termination of a 10 year $86 million deal reached in 2016:


The fight has been taken to Under Armour by the California Golden Bears Athletic Department. In a statement from the university, Cal states that the apparel brand does not hold reasonable action in terminating the contract signed with Cal in 2016.

“While we understand that we are in challenging times, we have been and remain committed to our partnership with Under Armour. We are confident that we are fulfilling the terms of our agreement and that Under Armour does not have grounds for termination. We know that UA has put years into building its college business, and we have done and will continue to do everything in our power to help them succeed. Cal Athletics remains steadfast in its commitment to support its student-athletes with the apparel and footwear they need to train, compete and succeed in their chose athletic fields.”


Cal’s branding was removed from the Under Armour website over the weekend, almost seemingly exactly as they announced they were terminating their record deal with UCLA.

The Maryland-based company signed on the dotted line with Cal back in 2016 to a 10-year, $86 million deal. Though it wasn’t even close to the UCLA deal worth $280 million, it still was a large contract during the time in which Under Armour was shelling out millions in deals across the country.

COVID-19 and multiple recent quarters of terrible sales have now caught up with Under Armour and they threatened to terminate the deal with Cal as such
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Aren’t the Skunks with UA now??? Cut their asses!
 


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