Cal Still Committed to Under Armour Despite Reports the Deal Is in Danger
Despite reports that Under Armour is attempting to end its 10-year, $86 million agreement with Cal, Cal released a statement on Sunday saying that it has fulfilled its obligations and claims Under Armour does not have the grounds to end the school's relationship with the apparel and footwear company.
Cal's association with Under Armour came into question after the Los Angeles Times reported that Under Armour is attempting to terminate its $280 million apparel contract with UCLA, claiming UCLA has not fulfilled all the obligations of its contract with the school. UCLA is challenging Under Armour's assertions, according to the Times report.
Soon thereafter, Michael Smith of Sports Business Journal reported via Twitter that Under Armour is attempting something similar with Cal.
Dennis Dodd of CBSSports.com also provided a similar report, but also noted that Golden Bears gear has been removed from the Under Armour site.
Under Armour made its intentions clear on Monday, telling the Financial Times, “Under Armour has recently made the difficult decision to discontinue our partnerships with both UCLA and the University of California, Berkeley, as we have been paying for marketing benefits that we have not received for an extended time period.”
However, Cal released a statement on Sunday, claiming it has met its obligations and is maintaining its deal with Under Armour. Here is that statement:
While we understand that we are in challenging times, we have been and remain committed to our partnership with Under Armour. We are confident that we are fulfilling the terms of our agreement and that Under Armour does not have grounds for termination. We know that UA has put years into building its college business, and we have done and will continue to do everything in our power to help them succeed.
Cal Athletics remains steadfast in its commitment to support its student-athletes with the apparel and footwear they need to train, compete and succeed in their chosen athletic fields.
Ending the deal with Cal will be complicated because neither Cal nor Under Armour signed the contract, according to Darren Rovell:
The COVID-19 pandemic has hurt retailers such as Under Armour, which furloughed 6,600 workers at its American retail stores and distribution centers in April, according to Barron's. Top executives took a 25% pay cut.
Cal and Under Armour agreed to a 10-year deal that began with the 2017-18 school year, ESPN's Darren Rovell reported in April 2016. The report said the deal with Cal was worth nearly $86 million and included a $3 million signing bonus, $3.5 million in annual cash payments and $4.76 million in annual product allowance.
Nike was paying Cal $2 million in product and $150,000 in cash in 2016-17 in the final year of its contract with Nike, according to the ESPN report.
UCLA and Under Armour reached their deal at about the same time that Cal did. UCLA agreed to the 15-year, $280 million deal in May 2016, according to ESPN, and it went into effect in 2017.
Under Armour issued a statement regarding its current situation wth UCLA:
“Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period. The agreement allows us to terminate in such an event and we are exercising that right. We know that this has been a challenging time for athletes, sports programs and performance apparel brands alike. Under Armour will continue to preserve our strength in this challenging environment, while maintaining a strong network of partnerships with individuals, organizations and leagues that make us the on-field authority for focused performers.”
UCLA issued a statement in response on Saturday, according to ESPN:
"UCLA Athletics learned this week that Under Armour is attempting to terminate its 15-year apparel and footwear contract with us and the Bruin community. We are exploring all our options to resist Under Armour's actions. We remain committed to providing our hard-working staff and student-athletes with the footwear, apparel and equipment needed to train and compete at the highest level, as they -- and our loyal Bruin fans -- deserve."
Under Armour currently has deals with three Pac-12 schools: UCLA, Cal and Utah. Nike has deals with seven Pac-12 schools, including USC, and Adidas has deals with Washington and Arizona State.
Follow Jake Curtis of Cal Sports Report on Twitter: @jakecurtis53
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