Why Apparel Companies Compete To Outfit College Hoops Teams

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The overall No. 1 seed Louisville Cardinals have been donning polarizing uniforms in the NCAA men’s basketball tournament this year. Young fans seem to love the new unis. The older ones, not so much. But Louisville and its athletics department didn’t have a say in the design, only the color scheme, say Louisville officials — because in the relationship between college athletics and apparel companies, the Nikes and Adidases of the world hold the cards.

In the old days, basketball and other college sports teams would simply purchase uniforms from vendors. But big-time college sports is different. Instead of a team paying an apparel provider, apparel providers give money, uniforms, equipment, and all manner of perks to college basketball teams.

What they get in return, of course, are merchandising rights. The first week of this year’s NCAA tournament – broadcast on CBS, TBS, TNT and truTV – garnered its highest television ratings in 15 years, and the 14-year contract between CBS and Turner to televise every game in its entirety is $10.8 billion. Big time college basketball, in other words, represents an almost unparalleled opportunity for these companies to get their products in front of a large group of enthusiastic customers. “The degree of competitiveness for these sports apparel companies to get their brand name out there is at an all-time high,” says Patrick Rishe, a sports economist at Webster University. “They realize a lot of people are watching.”

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As a result, the dominant brands in the apparel industry — Nike, Reebok, Adidas, Under Armour — have flipped the vendor-customer relationship over the last few decades. And thanks to the economic downturn over the last few years, apparel companies have gained even more sway, especially with public universities that have had state funding cut since the recession. “Athletic programs are, more than ever, under tight budget crunches, and the people running these athletic programs are more keen to maximize revenues whenever and wherever they can,” says Rishe.

Contracts between colleges and apparel companies are rarely disclosed, so it’s difficult to determine how much schools receive from apparel companies. But one surfaced last spring on Paul Lukas’s Uni Watch blog, which is devoted to all things sports uniform related. The contract between Nike and the University of Memphis, from 2008, is telling. The contract includes typical exclusivity rights for Nike and forbids players from covering Nike’s logo with tape.

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But the more interesting sections outline the $1.5 million Memphis gets each year in uniforms and equipment, the $660,000 in cash payments annually, the $500,000 bonus for signing with Nike, plus a host of perks. That’s $11.3 million Nike will have given Memphis under the 5-year contract. In turn, the apparel company gets perks of its own: game tickets, parking passes, advertising on campus, etc. But of course the biggest perk of all is the Memphis gear that Nike can sell.

Last month, Adidas unveiled a new line of “camo” jerseys before the conference tournaments and the NCAA tournament for six schools: Louisville, Notre Dame, Cincinnati, UCLA, Baylor and Kansas. In Kansas’s case, according to KUSports.com, the school received no money specifically for wearing the alternate jerseys, but it doesn’t seem like Kansas had much say in the decision. “Sometimes you’ve got to be a team player, and Adidas has certainly been good to us, there’s no question,” Kansas coach Bill Self said last month. “And this is something that was important to them, that they are able to market it with some other schools that they feel that can help them in this area. Certainly, we’re going to do that to try to help them.”

The Kansas men’s basketball team is a perennial favorite in the NCAA tourney, and one of the more popular teams in the country. It’s unclear how much money Adidas gives the school each year, but Rishe estimates that apparel companies give schools anywhere from $200,000 to $2 million a year. And if Memphis is getting $1.5 million in just equipment and uniforms, it’s likely that Kansas – a bigger school with a larger fan following – is garnering more.

Rishe says he doesn’t see any reason the schools should resist these deals. “There should be no shame in getting everything you can from shoe and apparel companies,” he says. “Whether you like it or not, these big-time college programs are charged with financing the rest of the athletics department. So there’s no shame for an athletic director holding out to try to get as much as he can.”

As for Louisville, Adidas is likely paying the school a couple million a year to be its exclusive outfitter. So it shouldn’t be much of a surprise that this year’s overall No. 1 seed, while they may be wearing polarizing jerseys, is also the most profitable team in college basketball.