Michigan’s new deal with Nike worth $169 million, school switching from Adidas

According to multiple reports, like the Tweet below from Rod Beard of the Detroit News, the University of Michigan’s newly-signed apparel contract with Nike is to be worth a total of $169 million. For apparel and products, Michigan will receive $5.3 million in the first year of the deal.

Michigan’s eight-year deal with Adidas, which expires in June 2016, was worth an average of at least $6.85 million per year.

The deal shatters the 10-year, $90 million contract Notre Dame signed with Under Armour earlier this year as the largest in the country.

Notre Dame is a private institution, and its apparel deal has not been made public.

ESPN reported Wednesday that Hackett wasn’t bluffing when he talked about making the decision on “more” than just the financial bottom line – that, in fact, Nike had offered the lowest bid of the three submitted by Adidas, the Swoosh, and Under Armour. I would guess the other bids were very close, however, because they probably wouldn’t sacrifice tens of millions of dollars. Nike will also pay a $12 million signing bonus. It would continue at the higher number the four following option years. That will be followed by payments of $4,820,000 each contract year until 2026.

The cash breakdown includes $4.82 million each year in base compensation for the first 10 years of the deal, then $5.32 million in 2026-27. Nike also has deals with Florida State, Ohio State and Duke, among others.

U-M’s association with the Collegiate Licensing Company will be a windfall for that organization. Under the Adidas contract, the terms were 10 percent and a minimum of $600,000 per year. Michigan had been an Adidas school. No longer – with proof positive that Nike is willing to set the market in a major way, the odds are now much higher that athletics director Steve Patterson can cash in and stick with the industry leader.

Additionally, UM also has a school option for a four-year extension that would extend the deal through 2031.

-Nike will provide three interns to U-M each summer, at a minimum of $15,000 each.

-Though the details are not specified in the term sheet, U-M will “make reasonable efforts to provide Nike with a package of complimentary sponsor benefits reflective of Nike’s sponsorship level and consistent with those benefits typically receive by Nike from top tier college programs”.