From Ukraine to the U.K., New York City to Idaho, the swoosh exists and accelerates its brand onward at every level, in every place.
The Oregon-based company, Nike, flourishes and retains sports dominion in all corners of the world, including here. According to The New York Times, the company’s logo has a nearly 100 percent rate of recognition among people in North America.
At least part of that materializes from its grasp on almost 190 Division I athletic departments nationwide.
Unsurprisingly, Nike’s most fruitful contracts lie with its most profitable locales — University of Texas and Ohio State University are both currently on 15-year deals, each worth about $250 million in mostly “promotional” apparel, but also chunks of real cash.
So, these behemoths of the college landscape are compensated heavily and permitted decades-long “all you can outfit extravaganzas” because of their worth as Nike advertisements. That is logical, but what about the comparatively scant and obscure conferences and their universities — the Sun Belt, Big Sky or Conference-USA schools, for example, which still adorn themselves in full-Nike regalia?
“We have to buy the uniforms,” Idaho Athletic Director Rob Spear said. “We’re able to purchase them at their wholesale costs. I believe it’s 50 percent off. It’s considerable, but still expensive, especially when you have to replace an entire team’s uniforms.”
That’s the difference. While the mammoths of collegiate athletics get a dollar and apparel-payout, schools like Idaho receive an “Annual Product Allotment,” plus a line of credit in wholesale discounts. Idaho is granted $400,000 in such discounts.
According to the university’s 2013-2018 contract with Nike, which The Argonaut received in response to a freedom of information request, the company provides $140,000 in what Spear describes as a “product line of credit.” Nike equips men’s basketball and football teams with shoes, warmups and camp t-shirts (plus some extra cleats for football players in the case of a postseason appearance), which is altogether worth $100,000 at retail.
Then there’s some flexibility on the remaining $40,000 worth of “promotional retail dollars,” Spear said. Often it goes toward teams in desperate need. However, university-selected basketball and football staff are entitled to order an extra combined $25,000 in apparel at retail value. A lot of this “Nike Elite” product is ordered to outfit athletics staff, Spear said, so the little that’s left of the “free apparel” is generally skimpy in relation to what the programs need.
“It doesn’t last very long considering you’re just grabbing stuff at full cost,” Spear said. “After that, you have to purchase everything …we can always say there’s not enough. We’re always using it all, never rolling anything over to the next year.”
So, if $125,000 of the school’s granted promotional apparel is disbursed to basketball, football and staff, than just $15,000 is left over for whatever need be. Fourteen programs are covered by Nike. All of that practice gear, off-court/field apparel, gloves, sleeves, extra shoes, coats, uniforms in general — those are chiefly paid for at the wholesale discount, not given to athletes for “free.”
Compared to its Power-Five neighbors on the Palouse at Washington State University, Idaho’s contract is more constricting. WSU Senior Associate Director of Athletics and Chief Financial Officer Matt Kleffner said the school’s $2.2 million product allotment gives it freedom to choose where all of the promotional product goes.
“With our new contract (2015-2025), our product allotment doubled. We can spread it around as needed,” Kleffner said. “I’d like it if the deal was bigger, but then again, it’s pretty good where we are. There are bigger markets with bigger deals, so I’d say, for us, it’s fair.”
Along with the comparably jumbo product allotment, Washington State’s athletic department also draws in $200,000 in cash to do with as it pleases. Whether it be purchasing supplementary Nike product at wholesale, or putting all of that money toward facility improvements, it’s the athletic department’s say.
Spear said Idaho’s current contract, which expires in May 2018, falls almost directly in line with the school’s initial deal, which ran from 2008-2013. Prior to that, Idaho was an Adidas school for five years. Spear said the shift came after the school solicited bids and received responses from Adidas and Nike.
The shift was practically fueled by the desire to change, but Spear said another uniform supplier transition is unlikely in the near-future.
“One of the obstacles when you take a look at potentially changing your uniforms, essentially, is you’d have to purchase entirely new sets of uniforms, both home and away, for every one of your teams, and that’s really, really expensive,” Spear said.
The only potential for a switch to come, Spear said, would be if, say, Adidas offered to supply entirely new uniforms as part of the transition, which is highly improbable for a non-Power-Five school.
“In the past we’ve gotten some quotes from Adidas in particular … and it seemed like Adidas might have been a bit more lucrative from what you’d perceive as (compensation),” Spear said. “But the large cost of changeover would offset any increase you could get there.”
In a warehouse connected to the Kibbie Dome sit boxes, stuffed full with additional Nike product. Spear said this is one of the positive results sticking with the same provider for a decade can produce.
“We have an existing inventory of extra sweats, shorts and practice gear, so if a kid comes midyear, we’ll have something to provide them,” Spear said. “We have a lot of inventory built up … if we switched, all of that stuff would be useless.”
In 2008, after Idaho made the switch to Nike, the athletic department held a large garage sale out of that warehouse. All of the supplementary Adidas apparel from years past was now obsolete, so it had to be sold at discount to the Idaho faithful.
Whereas the Nike contract pertains directly to the university’s athletics, it does not hold restrictions on fan-apparel.
“Nike doesn’t have an exclusive for anything at retail,” Director of Trademarks Sue Smalley said. “A lot of schools exclude any companies that do performance wear, but we don’t have any exclusives, so hopefully that’ll stay. They’d send it to me if they were trying to do that.”
Smalley said Nike can be difficult to work with at times. Although she said having access to branded custom sportswear is nice, the minimums on Nike products are high, so working through local companies, like Pro Image in Lewiston, proves difficult.
Idaho’s athletic department uses a company called Winthrop Intelligence to ensure fair deals. Spear said the company acquires public record information and releases it to the university upon payment. This way, the athletic department can compare university contracts, which assists in negotiating contracts.
The new Nike contract, which Spear said has been in negotiations since November, will likely be analogous to the past. He said annual product allotment will take a $10,000 hit, but overall, it will predominantly align with schools of similar size.
“Because of the drop, they tried to get us closer to the Big Sky average,” Spear said. “I just didn’t want us to be losing money.”
Negotiations are tricky, however. Considering three companies dominate the sporting apparel market, Idaho’s choices are to either stay the course or suffer major financial impairment.
“There’s three, the ‘big-three.’ There’s not a whole lot of competition, so we don’t have a huge opportunity to leverage the Idaho brand,” Spear said.
Colton Clark can be reached at [email protected]