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Comparing Ohio State's contract with Nike

By mrasor Published: July 14, 2008

At the suggestion of Dan Kadar (whose Browns blog you should read), I requested a copy of Ohio State's contract with Nike, to give some perspective on what the Zips are getting with adidas.
I have some general observations, but I encourage you to read the contracts for yourself as well.
OSU's licensing contract with Nike OSU's equipment supply contract with Nike OSU's appearance contract with Nike Akron's expired contract with adidas

    As for my observations...
    Unlike Akron's contract, OSU's explicitly extends through 2014.
    The Buckeyes have to play in any Nike-sponsored basketball tournament, as long as it's feasible.
    The university will get $28,000 for appearances made by its players and coaches and $22,000 for consulting with Nike on product designs.
    Nike can get out of the contract if any coach or staff member disparages the quality of Nike products.
    The university is not allowed to disclose the terms of this contract, except as required by law. Much to Nike's chagrin, most public universities in America deal with what's called a sunshine law.
    This contract is much more robust with waivers, disclaimers and legal protections than the Akron/adidas agreement.
    Nike has the exclusive right to make Ohio State jerseys of all sizes -- adult through infant. One exception: pet apparel. Next time you want to suit up your rottweiler with a Greg Oden jersey, thank OSU for not limiting your choices to only Nike. You will see Starter brand jerseys, too, but that's only because Nike sub-licensed that right to produce them.
    The contract explicitly bans the university from selling any licensing right to Reebok, Puma, adidas or Under Armour.
    Nike will be understanding if OSU wins a Big Ten championship, and the conference makes the players wear non-Nike T-shirts and caps.
    Nike will give OSU $2.2 million in athletic gear and apparel this year. That will escalate to $2.5 million by the end of the contract.
    Coaches, staff and some athletic department employees get to tap into a $150,000 budget for personal Nike items. That sounds like a conflict of interest to me. The people who negotiated the contract added in a little provision for themselves to maybe grab a new set of Nike irons. Akron has a similar provision, but the amount is only $8,000.
    Nike gets 10 tickets to every football game, including bowl games. Nike gets to choose one football game where it gets 50 tickets. If you've been keeping up on the John Widowfield saga, you'll know Buckeye ticket distribution has become a big deal. (By the way, Widowfield is a great guy. It's a real shame to hear he was involved with this.)
    No OSU coach or staff member can wear a non-Nike product -- not even a non-Nike product that has been made to appear like a Nike product. (Those iron-on Swooshes won't cut it.)
    Nike will pay OSU $1.18 million for this exposure, plus the millions in free apparel/gear. Akron did not get a penny. It also has to pay for its adidas gear (albeit half-off).
    If the football team gets banned from television appearances, Nike only owes OSU 50 percent of that $1.18 million.
    Buckeyes linemen better have strong ankles. Nike does not allow any taping of their football shoes to cover the Swoosh. That $1.18 million will decrease by 1 percent for every shoe that has a covered Swoosh. One exception: If a player gets hurt DURING the game, the trainer must honestly decide that the player cannot continue without taping over the Swoosh. Otherwise, it's 10 grand down the drain. (You can't make this stuff up.)

    Some overall thoughts of mine...
    This is just one example of how a giant fan base and decades of rich tradition allow a program to thrive financially. Now consider all the money coming in on gameday, and all the money from rich donors, and all the television revenue. It's mind-boggling. It goes to show how impressive it was for Akron to compete with the Buckeyes for one half last fall.
    Akron should add provisions into the adidas contract to ensure it can capitalize on any surge in popularity. Just for the heck of it, add in a line that gives the Zips $500,000 in free merchandise if they play in a BCS game, or $100,000 if they play on New Year's Day. It can't hurt, and the likelihood of it happening shouldn't deter adidas.
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