Nike is the giant of the sports apparel business and to say otherwise would be a gross understatement. The Swoosh is synonymous with college sports in this country and it has a brand name that creates instant recognition. For many people Nike is the only thing they wear when it comes to athletic apparel. The influence is there in our sports culture. In the Pac-12 Conference the influence is just as immense, but in the last few years there have been teams in the Pac-12 that have dropped Nike as the school’s athletic apparel supplier. It begs the question, is Nike losing its grip on the Pac-12 Conference?
By now we all know, or should know, that Nike was homegrown in the state of Oregon on January 25, 1964 by Phil Knight and Bill Bowerman. The original name was not Nike, but Blue Ribbon Sports. The name changed to Nike, the Greek goddess of victory, in 1971 and Phil Knight has not looked back since.
When one thinks of Nike and college football there is one school that comes to mind and that is the University of Oregon. Why? Pretty simple. Phil Knight is a Duck. Around the state of Oregon he’s known as “Uncle Phil” because of the money he spends on his beloved school in Eugene, Oregon.
The idea of making the Oregon Ducks ground zero for a new type of branding in college athletics began once the Ducks earned the right to play in The Rose Bowl game in 1995. It was the first invite for the Ducks in a millennia and Phil Knight saw an opportunity to shake up college football at Oregon and possibly beyond.
Even though the Ducks lost that Rose Bowl game, Knight was determined to keep the program relevant. It has been reported that Uncle Phil went to the powers that be at Oregon and said it needed to make improvements in its athletic programs, namely football, to keep the Ducks relevant in some capacity in the Pac-12 Conference.
What did Phil Knight do?
He opened up his wallet and decided he was going to give back to the school he loves by turning the athletic program into his own personal proving grounds on university branding.
Over the course of the next few years the amount of money Knight gave to Oregon was really unprecedented in modern athletics. The only other booster of a school that comes to mind in terms of money given to their school is Boone Pickens at Oklahoma State.
When Oregon needed money for an indoor practice facility, an addition to the football stadium, an athletic building for any athlete to use, a completely new basketball arena, improvements to the track and field stadium, new uniforms and helmets, and the Marcus Mariota Center, Phil Knight was there with an open checkbook.
What was this creating?
Simply put, this was Knight’s plan to put the Oregon athletic program on the map of relevancy in college athletics.
Slowly, but surely, as these buildings and improvements were finished the haters came out of the woodwork. Many people thought that this was an unfair advantage for the university. Unfair? I scoffed at that notion.
There are plenty of loaded boosters in this country throwing all sorts of dollars at their universities to try and give them an advantage over the other schools, so it’s nothing different than what goes on at many universities and colleges. To me, it’s just jealousy on the fans’ part and it is just luck that a school has an alum that is the CEO of a world-wide sports apparel company. If I had a company that was world-wide and worth billions you can guarantee that I would be giving my Oregon State Beavers all the things they would need to be competitive in the business of college sports.
The influence of Nike at the University of Oregon is unparalleled in modern day sports. The swoosh is on almost everything at the school. Even the garbage cans around campus have the Nike emblem on them. Yes, the garbage cans.
What about the influence of Nike in the entire Pac-12 Conference?
When you take a look at the landscape of the Pac-12 it shouldn’t come as a shock to anybody that Nike outfits over half the conference. Inside the conference, Arizona, Colorado, Oregon, Oregon State, Stanford, USC, Washington, and Washington State are all outfitted by Nike, so the influence is there.
The amount of cash that Nike hands out to these schools and the amount of product it gives the athletic programs varies from school to school. For example, Oregon which has Knight’s hand prints all over it, does not get the most money and product in its deal with Nike. They receive approximately $250k-$600k in cash from the apparel giant and around $1.4 million-$2 million in product. The Washington Huskies, however, receive $400k-$850k in cash and around $2.4 million-$2.8 million in product. The school that receives no cash from Nike is Oregon State. The cynic in me says Uncle Phil can’t give any liquid cash to the in-state rival out of loyalty to Oregon. I know it’s probably not the case, but I did find that number interesting due to the fact that every other Nike school in the conference receives some cash from Nike.
The only numbers that were not available were Stanford and USC because they are private institutions and are not required to release those numbers. For people to think that this is where the influence stops would be short-sighted.
Here’s the question I have about Nike’s influence within the Pac-12: Is it losing that influence?
Like I said earlier, eight of the 12 teams in the Pac-12 are outfitted by Nike, but in the last few years some of the teams that were wearing Nike have left for greener pastures with other sports outfitters. Even the Pac-12 Conference is officially outfitted by Adidas.
Utah is one of two teams in the conference that is suiting up with Under Armour. However, that contract is up after the 2016 season, so it’ll be interesting to see if Nike can bring an offer to Utah that brings the Utes onto the Nike team. What will Nike have to do to get the Utes? Certainly put the cash value and apparel value towards the top of the conference and probably offer internships or jobs for Utah graduates. They will need to make an offer that makes it worth the change for Utah.
When I mention what Nike needs to do with Utah it’s due to the fact that the California Golden Bears just inked a lucrative deal with Under Armour. The growing sports apparel giant made California its thirty-fourth Division I all-school partnership. The deal is for 10 years and approximately $86 million in cash and product. Nike paid California $150,000 in cash per year and with Under Armour, California will receive $3.5 million in cash. That’s a total no-brainer for the school. Under Armour will also give students internships and graduates will have the opportunity to get jobs in the company. The deal also includes setting up nutrition and fitness challenges for students, alumni, and staff. California is being put on the front page with Under Armour and that’s what these teams want.
Case in point: Arizona State.
Two teams from the Pac-12 have gone with Adidas as their apparel outfitter. Arizona State and UCLA have inked deals with Adidas and it has given them greater exposure and money. For Arizona State,when you are one of approximately 12 teams under the Adidas banner, the chance to get a better money deal was too good to pass up. The Sun Devils doubled the amount of annual cash they’ll receive by switching from Nike to Adidas. They went from $2.1 million annually to $4.2 million annually. The totality of the contract is for eight years and worth $33.8 million.
When you don’t have to share as much of the money with other schools, the intake for you is going to be substantially more significant, and in the long term that is going to help Arizona State. One of the reasons for the change was to become a priority with its apparel partner. Nike has 45 power conference football clients and ASU was not a priority for it. With Adidas ASU got the reassurance of being a top-five priority.
Here’s the issue that Nike is starting to face with some teams from the Pac-12 moving on from them. Nike outfits so many teams in this country that the share of the money is limited. It’s the small fish in a large pond type of situation for many teams when dealing with Nike. The universities and colleges, like Arizona State and California, feel like they are just a number to Nike and that they are not a focus for the powers that be at Nike.
As much as people tend to think that there is an infinite supply of money when it comes to this sports apparel business. There isn’t. Nike has to give an offer that is good for the school and good for itself. Do they need to change what they do? That’s a tough question there.
We all know Nike is the strongest brand in sports apparel and its influence on the Pac-12 is still dominant. Still, teams are leaving “the swoosh” for better monetary deals that give them better exposure and provide more for the university students, staff, and alumni. This will be an aspect that Nike will want to take a look at when re-signing with any of the Pac-12 schools.
I understand the dilemma that universities have when they consider going with some brand other than Nike. The money that they may gain is weighed against leaving the Nike brand. For some, it’s a no-brainer. You take the money and run. For others Nike does more than any of these other companies can.
I don’t see anything changing dramatically inside the Pac-12 with Nike. Universities will do what’s best for them, but in the end, the brand of Nike is hard to walk away from. I, for one, would have a difficult time going with somebody else to outfit my team. I’m a Nike guy through and through and feel the influence of Nike will continue to be felt in the Pac-12 Conference for years to come.
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