The University of Oregon is winning again and this time the scorer is Nike. There has been an additional touch of lucrativeness to the sponsorship deal we know the University to enjoy with Nike. In this new deal, the University will be donning $88 million in cash, as well as sporting equipment in course of the next 11 years.
The Oregon Board of Trustees will look into executing the renewal with Nike. The current contract both parties are executing at present is worth over $740 million cumulatively with an annual installment of $2.5m (in sporting apparels).
From the arrangement being cooked by Nike and the Oregon Board of Trustees, Nike would be doling out about $2m- $2.5m on an annual basis in cash. In addition to this cash, Nike would also be giving the University of Oregon sports accessories and gear worth $5m – $6m on an annual basis, which would sustain the University’s various sporting departments.
With the new deal coming in place, the University of Oregon would enjoy royalties on sales Oregon-related Nike products. Basically, the ways these deals operate is that when the University finishes a certain amount of product sales (for the specific associated brand), it will then be entitled to a stipulated percentage of such sales.
With this new deal, the entitled percentage would be leaping to $15, from a previous $12. That is not all. With this new deal, Nike will be giving internships to students of the University. In the previous deal that Nike operated with the university, there was only one internship offered.
This could easily look like generosity from Nike at first sight, but a deeper view of the deal from the commercial angle justifies why Nike could give so much out so readily. This pertains to the amount of advertising exposure Nike stands to gain from the deal. Aside from the promotional dimension of the deal (for Nike), the reputable sports brand would reap millions of cash just from selling Oregon Duck gear.
Universities around the country, for some time now, have become fertile soils for sports brands like Nike. This is understandable given the national explosion of college sports. Almost everyone in college wears sporty sneakers, and wearing sporty shoes even outside the sports arena is commonplace for millions upon millions around the world. Hence, it would go well for sports brands when they see sports celebrities rocking sneakers with their logos stamped on them, and well visible.
Last year, it was UCLA that struck a humongous $280 million deal with Under Armour. It was pacesetting and revolutionary all together, with the school taking home a cool $18.6 million in cash for 15 solid years. This is a historical deal that sets the bar even higher for what many would suggest is already ludicrous.