Nike Signs Deal With Michigan for $169 Million

If you did not think athletic programs earn money for their schools, think again. The University of Michigan has signed an all-sports new apparel and shoe deal that has been reported to be worth $169 million.

The deal is for 11 years and will run from the fall season of 2016-17 through the end of the fall season of 2027, with Michigan having an option to extend the deal through the end of the 2031-32 season.

The cash as well as equipment part of the contract over the 11 guaranteed years is valued at $122.3 million with $65.5 million that will be paid in cash and $56.8 million paid in equipment and apparel. Another $46.5 million will be paid in equipment and apparel over the option period of four years if extended by Michigan.

That ends up working out to be $11.26 million per year on average over the 15-year period.

When looking at it on a yearly basis, it is not larger than the deal Notre Dame has for 10 years with Under Armour that was signed in 2014, said a source that has knowledge of both deals.

At a rate of $8.2 million per year of cash and equipment, the current deal Michigan has with Adidas, which ends following the end of the 2016 spring season was the most lucrative for public schools in the nation.

Officials at Nike would not make a comment on the financial numbers, but it looks as if the largest apparel and shoe company in the world was interested in having back the Michigan Wolverines, despite the football team floundering the past few years.

This deal equates to 2.5 times the highest commitment annually in gear and cash that Nike currently holds with any of the public schools in the U.S.

The second highest, according to data from a research firm on the Internet, is the Florida State Seminoles. Nike reportedly gives Florida State $4.4 million annually in equipment and cash.

Despite the interest by Nike, some sources said that Nike was the lower bidder, but due to worries over the current Adidas deal that has been often criticized, Michigan’s Jim Hackett, the interim athletic director felt the right deal with the best partner was what was most important.

The decision, said Hackett, is more than just Michigan athletics, at its core, it is all about the University community and two top names reuniting in a deal that speaks to more than just apparel and equipment.