Ohio State and Nike Sign New Seven-Year Agreement – Ohio State Buckeyes
9/12/2007 12:00:00 AM | General
COLUMBUS, Ohio – The Ohio State University Department of Athletics and Nike USA, Inc. have signed a new seven-year contract that assures Ohio State’s 36 varsity teams and more than 900 student-athletes of having the best and latest in high quality footwear and apparel.
The three-part agreement went into effect Aug. 1, 2007 and expires July 31, 2014. Nike, if it so chooses, may exercise a three-year option that would extend the arrangement through July 31, 2017. In addition to an Equipment and Supply agreement, the new contract also has separate agreements for Appearances and Consultations, and Licensing.
“As a completely self-supporting unit of the university, we are constantly seeking ways to generate new dollars to support our program,” Eugene Smith, Ohio State’s director of athletics, said. “This agreement with Nike guarantees our student-athletes of the very best product in the industry and allows us to direct the money we would have spent on footwear and apparel to other areas. We are extremely pleased to have entered into this agreement with Nike.”
Equipment Supply Agreement
As the exclusive provider of footwear and apparel for Ohio State’s athletics program, Nike will provide OSU teams with $2.34 million per year in free product, or $16,405,000 over the seven-year period.
Nike also will pay the Department of Athletics $1.188 million annually for the right to be Ohio State’s exclusive provider, meaning Ohio State will receive $8,316,000 over the course of the seven years.
There are also bonus payments for football and men’s and women’s basketball based upon bowl appearance and the national championship in football and in-season rankings and national championships in the two basketballs.
Appearance and Consultation Agreement
In an effort to promote sports participation at all levels and ensure team member’s safety and comfort during competition, Nike will pay Ohio State $50,000 annually: $28,000 for appearances by the coaching staff and $22,000 for design and safety input from the coaches.
License Agreement
The university will receive a 12.5 percent royalty from Nike on net sales of those products for which the company is the exclusive licensee authorized to sell such items (jerseys and authentic competition apparel) and an 11 percent royalty on all other Nike products with a minimum guarantee of $200,000 annually.
The total value of the package for seven years is $26,121,000 not including team bonuses or licensing revenues.
