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tBBC Ohio State – Nike Ink A Rather Large Deal


Ohio State – Nike Ink A Rather Large Deal
via our good friends at Buckeye Battle Cry
Visit their fantastic blog and read the full article (and so much more) here


(Image courtesy of The Lantern)

The Nike logo may get a more prominent display for a few more years.

It was announced yesterday (Thursday Jan 14th) that the Ohio State University and Nike entered into a contract extension beyond the current agreement that expires in 2018. The new agreement, for 15 years, takes the OSU-Nike relationship to the year 2033. Per the Wall Street Journal,

Nike Inc. has agreed to a $252 million deal with Ohio State University to extend its existing sponsorship by 15 years, escalating an arms race among sportswear makers and top sports schools.

Ohio State will receive $112 million in product from Nike and at least $103 million in cash, including royalty income, according to terms of the contract reviewed by The Wall Street Journal.

The agreement, most of which will take effect with the 2018-2019 season, includes more than $41 million in commitments beyond the Buckeyes’ athletic department to include scholarships and internships for non-athletes at Ohio State. (Ken: emphasis mine)

This, in the words of Vice-President Biden, “Is a big fcking deal”. The amount ($252 million) is slightly larger than the deal that Nike recently inked with University of Texas that covers the same span of 15 years. This deal specifically allocates funds to benefit the general student population (“non-athlete students”).

Per Ohio State’s (athletic) web site:

With 36 varsity sports and more than 1,000 athletes, Ohio State has one of the largest self-sustaining athletics departments in the country. The athletics department is also a significant contributor to the broader university, contributing more than $30 million a year to support projects such as the renovation of the Thompson Library.

With this many varsity sports (18 men’s, 18 women’s), that is a lot of upkeep and overhead. I’m glad that Nike is helping/underwriting the costs to maintain these programs. With 2014 athletic department revenue of $145 million, you’ll notice there is no subsidy and there is a “profit” that spins off to the “common wealth“. Rounding to 60,000 (student enrollment at Columbus, your mileage may vary) we have 1,000 students taken care of in one form or another, but there are still 59,000 (or so) non-varsity students on campus.

Again, from OSU’s web site:

“We approached this as a university contract, not one that’s purely focused on athletics,” said Gene Smith, Ohio State’s vice president and Wolfe Foundation-endowed athletics director. “Under this partnership, every student — whether they play club sports, Division I sports or no sports at all — will be eligible to benefit.” (Emphasis mine)

OK, it seems that OSU President Drake and A.D. Smith have got my earlier concern covered. The following paragraph is also from OSU’s site. I fell compelled to pass it on to you.

Ohio State’s student-athletes excel in the classroom, leading the Big Ten Conference on several measures. For 2014-15, 304 Ohio State student-athletes earned Academic All-Big Ten honors (tied for first in the Big Ten), and 80 students were named Big Ten Distinguished Scholars (the most in the conference).

When discussing the “brand value” of Ohio State, as Joe & Clair did recently, this arrangement validates the gestalt of the Ohio University experience and what it offers to students.

It seems that Ohio (the state of) and Nike value one another’s company, also per the WSJ:

Nike said last month it had signed Mr. (LeBron) James to a lifetime endorsement deal.

I appreciate the fact that Phil Knight keeps that money rolling into the Buckeye State.

In closing, for comparison, Nike signed a deal with UM for 11 years and $169 million. A good bit shorter term and far less valuable than the Ohio State deal; but then, why wouldn’t it be?

The post Ohio State – Nike Ink A Rather Large Deal appeared first on The Buckeye Battle Cry: Ohio State News and Commentary.

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