March 6, 2021

DCTRS

Damascus Center for Theoretical and Civil Rights Studies

UCLA’s deal with Jordan Brand, Nike worth about $7.7M per year

UCLA’s new six-year, $46.25-million contract with Jordan Brand and Nike won’t match the massive infusion of cash the Bruins received from Under Armour but comes with its own significant value.

The contract that the sides agreed to in December will provide UCLA with among the most gear of any athletic department in the country that wears what’s widely considered the hippest brands in apparel, according to one person close to the situation not authorized to disclose the details of the deal publicly.

The average value of a deal that takes effect July 1 is roughly $7.7 million per year in apparel and cash, with the majority of the value coming in gear. UCLA will receive $500,000 per year in cash plus performance bonuses but can adjust its compensation up to 25% per year to receive more cash versus product if desired.

The Bruins are scheduled to receive product allowances of $9.5 million in Year 1, $6.5 million in Year 2, $6.625 million in Year 3, $6.75 million in Year 4, $6.875 million in Year 5 and $7 million in Year 6.

The total yearly compensation amounts to less than half of the $18.4 million UCLA received annually from Under Armour in rights and marketing fees plus clothing, shoes and equipment.

But the new deal could be considered a triumph for UCLA given it was negotiated during a pandemic with massive revenue drop-offs nationwide and at a time when the Bruins had zero leverage after Under Armour backed out of the record 15-year, $280-million deal it had signed with the school in 2016.

UCLA has since sued Under Armour for breach of contract, seeking to recoup more than $200 million.

The biggest immediate upside to the Bruins’ deal with Jordan Brand and Nike is an expected recruiting appeal and swag factor among current athletes. The Bruins football and men’s and women’s basketball teams will wear Jordan Brand while the rest of the school’s varsity sports will wear Nike.

UCLA could strengthen its position to negotiate a more lucrative deal once the contract expires if its marquee programs can reverse their recent fortunes; the football team has posted five consecutive losing seasons and the men’s basketball team is seeking its first appearance in the NCAA tournament since 2018.

The Bruins’ next deal may also benefit from the exposure the school could generate for its apparel sponsor with the 2028 Olympics bound for Los Angeles. Nike has the option, at its sole discretion, to extend its contract with UCLA for two years through June 30, 2029.