Under Armour's deal with Notre Dame, signed in 2014 for 10-years, is only worth $90 million total in cash and merchandise.
The value may be lower, as Under Armour gave Notre Dame the option to receive some of the cash value in stock. If Notre Dame accepted payment in stock in lieu of cash, the value is likely lower than $90 million and could be lower than Cal's $86 million deal. Under Armour's stock has dropped almost 80% in the last five years.
Plus, there may be more ND fans buying UA/ND gear than Cal fans buying UA/Cal gear, which might help justify the cost. ND is a bigger brand than we are when it comes to athletics.
UCLA and Cal are also in the most expensive markets for media, labor, real estate, etc., which would make their agreements more costly from Under Armour's perspective than Notre Dame, Auburn or others.
These college sponsorship contracts typically require the sports brand to have a retail store in the city or region of the school they're sponsoring to be able to sell the gear, advertise the college brand prominently in their stores, build or upgrade an on-campus store, etc.
Yeah, during Coach Martin's time at Cal, both the athletic director and Chancellor positions were in transition and even then, i think the UC Regents have to rubber stamp any hiring decision?
The Cal and overall UC bureaucracy is so arcane, I'm surprised anything gets done.
...Furthermore, the California Civil Code permits oral contracts, except where the Civil Code specifically requires a written contract. ... Therefore, the terms of an unsigned contract may be enforceable against a party depending on the circumstances.
Lawyer here - one of those contracts that specifically require a written contract under the California Civil Code are contracts that cannot be performed in 1 year, so a multi-year deal like this not being signed by either party is problematic. There are ways around this, but without looking at the contract, we can't know for sure.
If this gets ugly, then both sides will fight about the intent of the contract and the parties negotiating the contract, the performance of each party for these first few years of the contract. This means lots of discovery - so lawyers will be digging up emails, letters, memos, phone calls, etc. This can get very expensive.
My guess is they will quietly negotiate an end or renegotiate a new contract, to avoid having all that dirty laundry dug up - I'm guessing the contract has some sort of out clause and UnderArmor will get out of the contract for less than whatever that is. They'll probably say some BS about the new economic conditions and that the contract can be re-negotiated again when the pandemic crisis is over.
I'm assuming force majeure comes in play here, COVID ruined all athletics and any contract -- signed or unsigned -- would probably be closed down regardless since UA has zero foreseeable opportunity for any marketing. I'm guessing negotiations really come down to whether or not Cal gets paid anything now that UA is going bankrupt. It's so crazy seeing all these companies -- I've seen this outside of college football -- just running on good faith, have no idea who signs off on that.
also apparently UCLA's has a Force Majure clause (that might be their out, depending upon what is says). I don't know if Cal's has one, it seems most of the others do not.
That's kind of crazy. I work with contracts all the time and have never seen anyone propose anything without force majeure, and I've worked with contracts from $50K total to open contracts with over $5M monthly budgets. This entire thing looks like it was handled by amateurs.
UA also sponsors Notre Dame, so I doubt Cal and UCla are their two biggest deals....
UCLA was 100% their biggest CFB deal, it was a huge thing when it was announced.
Under Armour's deal with Notre Dame, signed in 2014 for 10-years, is only worth $90 million total in cash and merchandise.
The value may be lower, as Under Armour gave Notre Dame the option to receive some of the cash value in stock. If Notre Dame accepted payment in stock in lieu of cash, the value is likely lower than $90 million and could be lower than Cal's $86 million deal. Under Armour's stock has dropped almost 80% in the last five years.
Plus, there may be more ND fans buying UA/ND gear than Cal fans buying UA/Cal gear, which might help justify the cost. ND is a bigger brand than we are when it comes to athletics.
UCLA and Cal are also in the most expensive markets for media, labor, real estate, etc., which would make their agreements more costly from Under Armour's perspective than Notre Dame, Auburn or others.
These college sponsorship contracts typically require the sports brand to have a retail store in the city or region of the school they're sponsoring to be able to sell the gear, advertise the college brand prominently in their stores, build or upgrade an on-campus store, etc.
Wasn't Cal paying Cuonzo Martin without signing a contract for like two years too?
Yeah, during Coach Martin's time at Cal, both the athletic director and Chancellor positions were in transition and even then, i think the UC Regents have to rubber stamp any hiring decision?
The Cal and overall UC bureaucracy is so arcane, I'm surprised anything gets done.
Wait, WHAT
jfc. someone who works for the university must have had the authority to sign such an agreement. This makes no sense to me, from either side.
You overestimate the competence of the Cal administrative bureaucracy.
Not a lawyer but...
...Furthermore, the California Civil Code permits oral contracts, except where the Civil Code specifically requires a written contract. ... Therefore, the terms of an unsigned contract may be enforceable against a party depending on the circumstances.
Lawyer here - one of those contracts that specifically require a written contract under the California Civil Code are contracts that cannot be performed in 1 year, so a multi-year deal like this not being signed by either party is problematic. There are ways around this, but without looking at the contract, we can't know for sure.
If this gets ugly, then both sides will fight about the intent of the contract and the parties negotiating the contract, the performance of each party for these first few years of the contract. This means lots of discovery - so lawyers will be digging up emails, letters, memos, phone calls, etc. This can get very expensive.
My guess is they will quietly negotiate an end or renegotiate a new contract, to avoid having all that dirty laundry dug up - I'm guessing the contract has some sort of out clause and UnderArmor will get out of the contract for less than whatever that is. They'll probably say some BS about the new economic conditions and that the contract can be re-negotiated again when the pandemic crisis is over.
I'm assuming force majeure comes in play here, COVID ruined all athletics and any contract -- signed or unsigned -- would probably be closed down regardless since UA has zero foreseeable opportunity for any marketing. I'm guessing negotiations really come down to whether or not Cal gets paid anything now that UA is going bankrupt. It's so crazy seeing all these companies -- I've seen this outside of college football -- just running on good faith, have no idea who signs off on that.
I'm in Labor and Employment Law and it's been a shitshow. I can only imagine the years of litigation over contracts, real estate, etc.
It's unclear whether Cal's deal is similar to UCLA, but some notable items from UCLA's contract:
- UCLA's contract was between Under Armour and the Regents of the University of California, by and on behalf of UCLA Athletics
- UCLA Athletic Director Dan Guerrero and UCLA Administrative Vice Chancellor Michael Beck signed on behalf of UCLA
- Kevin Plank, the CEO, signed for Under Armour
- The Controlling Law is California
also apparently UCLA's has a Force Majure clause (that might be their out, depending upon what is says). I don't know if Cal's has one, it seems most of the others do not.
https://twitter.com/novy_williams/status/1278099620263088128
That's kind of crazy. I work with contracts all the time and have never seen anyone propose anything without force majeure, and I've worked with contracts from $50K total to open contracts with over $5M monthly budgets. This entire thing looks like it was handled by amateurs.
The contract may have been unsigned on Cal's part if it required Cal's administrative vice chancellor to sign.
The position of vice chancellor for finance and administration was unfilled at Cal from Feb. 2016 to as late as July 2017.
This is pretty bizarre. I'm don't know much about such legal things, but what's the advantage to not signing a deal like this?
Ability to walk away?