The Indiana University basketball team has signed a long-term apparel agreement with Adidas. The university will receive $53.6 million over eight-years under this new agreement. This is the fifth highest publicly disclosed college athletic apparel deal. The deal is a win-win for both parties, as the athletic clothing company is gaining significant brand recognition and increasing its revenue while the university gets valuable marketing support. Here are some details about the Indiana contract.
Adidas will be able to reduce base compensation payments if the Indiana Basketball team fails to perform under the new contract. It is a clause that will prevent the company from receiving a full six-figure bonus for every year of the contract. The amount of money the team will receive is not known, but the company does receive some gear in exchange. The deal will also include alternate helmets, which will remain part of the marketing strategy.
The contract not only announces the new contract but also provides a number of perks that the company should consider. These perks include the right to “first dealing” or “first refusal.” The first means that Indiana cannot engage in apparel negotiations for 180 days after the end of the contract. This gives Adidas a head start in negotiations for a new deal. The latter also means that Indiana must present any offer to Adidas before it receives it form any other brand.
Adidas will provide new uniforms for the basketball and football varsity team. In order to ensure uniformity across all 24 sports, Adidas will also conduct a branding audit of the school’s athletic department. The agreement will also include a marketing commitment to IU Athletics, which will include co-branding efforts as well as in-store promotions. Although the agreement is still in its infancy, the university will soon see the benefits of the partnership.
The contract will also have provisions for significant uncomfortability of shoes. Adidas is obligated to repair any shoes that result in medical conditions related to wearing them. The contract with Indiana also requires that Adidas correct any problems in shoe design. The contract is valued $53 million and will run through 2024. Despite the new contract, the Hoosiers still haven’t won the Big Ten Championship in 1967.
As a result, the University of Louisville and Indiana have filed a lawsuit to challenge the Adidas contract. The NCAA will decide if the deal is legal. However, the company can terminate the contract at any time. This is what happened in Louisville, where Pitino’s sex scandal as well as NCAA punishment have given the company power to end ties with the university. If the contract is terminated, the school may be forced to pay millions of dollars to settle the lawsuit.
Other perks included in the Indiana Adidas contract were added to the contract. The university is required to provide Adidas with a variety of perks during the contract term, including state-of the-art equipment, video technology, and highly sought-after internships. These perks allow Indiana to leverage its powerful brand. Other benefits include suites and sideline passes, as well as tickets to the basketball championship games. The school was also given twenty tickets to the Final Four.