Under Armour has officially informed UCLA Bruins Athletics that they’re intent on terminating the record apparel deal signed in 2016. Los Angeles Times writer Ben Bloch reported the news on Saturday, saying that current athletic director Dan Guerrero (for all of three more days) said that the university is exploring all the options to resist such an action.
Under Armour has informed UCLA that it is attempting to terminate its record $280-million apparel deal with the school. In an email to UCLA constituents, athletic director Dan Guerrero wrote "We are exploring all of our options to resist Under Armour's actions."— Ben Bolch (@latbbolch) June 27, 2020
Bloch continued the tweet with a mention of what we all know or what we all likely thought upon hearing that news.
The termination of the Under Armour deal obviously would be a huge blow to a UCLA athletic department already facing a massive budget deficit.— Ben Bolch (@latbbolch) June 27, 2020
UCLA and Under Armour launched their record apparel deal back in May of 2016, a $280 million apparel and shoe deal intended to last 15 years. The agreement went into effect on July 1, 2017. 247Sports notes that Texas and Ohio State each had apparel deals with Nike that were in the same vicinity, each worth roughly $250 million over 15 years.
We all also know how big of an obstacle this would become for UCLA as we all know the deficit the Bruins are facing. That $19 million deficit was the first athletic deficit since 2004 when the numbers were just a mere $164,000.
Former head coaches of the men’s basketball and football programs Steve Alford and Jim Mora Jr. were bought out of their contracts for $3.9 million and $12.5 million, respectively. While donors helped with those buyouts, those are only set to come in incremental amounts and the $2 million signing bonus for current men’s basketball head coach Mick Cronin also did not help.
The rise in travel and head coaching salaries across the majority of other sports certainly does not help, still, through it all, Guerrero remarked that there was the possibility of a long term solution.
It’s almost like he wasn’t even worried about it because he had a foot out the door.
It is also important to note that Under Armour is also reportedly looking to terminate their deal with Cal as well. It seems that the Maryland-based company is having some financial issues of their own.
Both UCLA and Cal have been removed from Under Armour’s website.
In a statement from Under Armour to the LA Times, the company said it was a difficult decision to terminate the UCLA deal.
“Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period,” the statement read. “The agreement allows us to terminate in such an event and we are exercising that right. We know that this has been a challenging time for athletes, sports programs and performance apparel brands alike. Under Armour will continue to preserve our strength in this challenging environment, while maintaining a strong network of partnerships with individuals, organizations and leagues that make us the on-field authority for focused performers.”
It certainly seems like, at least from UA’s statement, that UCLA under its current regime wasn’t holding up their end of the bargain.
We’ll see what the next steps are for UCLA but it certainly seems like Under Armour is moving on without hesitation after that statement.
To see the silver lining, all you have to think about is one simple word: Nike.