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Financial terms of Auburn’s new Under Armour deal announced

Michael Niziolek

mniziolek@ledger-enquirer.com

CORRECTS TO CORNERBACK TRUMAINE WASHINGTON (15) FROM WIDE RECEIVER TRAVEON SAMUEL (15) - Auburn wide receiver Ricardo Louis (5) makes a touchdown catch against Louisville cornerback Trumaine Washington (15) during the second half of an NCAA college football game, Saturday, Sept. 5, 2015, in Atlanta. Auburn won 31-24.
CORRECTS TO CORNERBACK TRUMAINE WASHINGTON (15) FROM WIDE RECEIVER TRAVEON SAMUEL (15) - Auburn wide receiver Ricardo Louis (5) makes a touchdown catch against Louisville cornerback Trumaine Washington (15) during the second half of an NCAA college football game, Saturday, Sept. 5, 2015, in Atlanta. Auburn won 31-24. AP Photo

Auburn athletic director Jay Jacobs called the contract terms of the university’s new long-term deal with Under Armour “vitally important.”

According to figures compiled by Forbes.com, the $78.1 million dollar apparel deal is in the top five nationally, and number one in the SEC.

The Tigers receive an average base compensation of $2.25 a year, and $4.05 annual product allotment. The average yearly value of the contract is $8.68 million dollars, a 137 percent increase over the annual average of $3.65 million in the previous contract.

Only Michigan’s recent $122 million deal with Nike, and Notre Dame’s $90 million deal with Under Armour are worth more annually.

Auburn was one of the first FBS teams to sign an apparel deal with Under Armour in 2005. The deal was extended in 2009 with a $27.45 seven-year deal.

Under Armour Contract Details

  • Contract Terms: July 1, 2016 – June 30, 2025
  • Total Contract Value: $78.1 million
  • Annual Average: $8.68 million
  • Base Compensation (cash): $22.5 million
  • Product: $40.5 million
  • Stock: $10 million
  • Royalties: $4.5 million
  • Marketing: $675,000 

In the recent round of negotiations, it was clear to Jacobs that no other company “valued Auburn athletics” the way Under Armour did.

“We had an exclusive negotiating period with Under Armour, we fully exercised that and after that period ended we reached out to some companies, some other apparel and footwear providers, but when it all came back around it was obvious Under Armour was the best partner for us,” Jacobs said Thursday.

Positive feedback from student-athletes was another key component in re-upping with Under Armour. Jacobs consulted with coaches, and made it a point to discuss the university’s apparel during student advisor committee meetings in recent years.

Under terms of a deal that runs from July 1, 2016 to June 20, 2025, Under Armour is the exclusive provider of footwear, apparel and equipment for training, and game-day use for all of Auburn’s 21 athletic programs.

The only exceptions are for items Under Armour doesn’t manufacture. The example given by Auburn’s chief operating officer David Benedict was volleyball shoes.

“Our agreement with that them is that in the event that they don’t manufacture something, or produce something, we can go out and get what we think is the absolute best for out student-athletes, we aren’t going to be put at a disadvantage,” Benedict said.

Benedict also described how the significant jump in product allotment will benefit Auburn’s Olympic sports.

The athletic department was spending upwards of $300,000 out of its own pocket, more than the $2.5 million annual allotment in the previous contract, to outfit all of Auburn’s 21 teams.

“We still weren’t able to take care of all of our student athletes the same way, we have got our product allotment up to a point now where we feel we can outfit everyone the same way,” Benedict said.

For the final year of the previous contract, Under Armour is increasing the value of the product allotment by $1.5 million to match the number the two sides agreed on for the new deal.

“Those are good partners,” Jacobs said.

Michael Niziolek covers Auburn football for the Columbus Ledger-Enquirer. Email him at mniziolek@ledger-enquirer.com or follow him on Twitter, Facebook or Google+

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