CU's Nike Contract - June 30th Expiration

[skibum]

We should be getting somewhere around the same money ASU/Maryland got on their contracts. CU doesn't have the same market leverage as some of the other schools that just signed gigantic deals.

I don't think Maryland is a market comp at all. It's not that they are not a good comp for us; they aren't a good comp for anyone, for the same reason that Oregon isn't a good comp for anyone. There is no way Oregon signs with anyone but Nike, not because Nike offers them the most money, but because so much other money is tethered to Nike. Similarly, there is no way Maryland signs with anyone but Under Armour, not because UA offers them the most money, but because so much other money is tethered to UA.

ASU is probably a decent market comp though - $4mm/year.

So let's take that as baseline.

How much above that number are you going to be really impressed with RG?
How much below that number are you going to start doubting his negotiating skills?

 

[CitizenKane]

According to Howell:
1) CU extended the contract 1 year when they added lacrosse, set to expire next spring.
2) CU is in the process of negotiating a longer term extension with Nike.
3) Anticipates news of a contract extension in the next few months.

I hope items 2 and 3 from Howell are wrong. I can't put enough emphasis on how big of a mistake it is to just negotiate with Nike on a longer term extension. These markets don't stay hot like they are now for long periods and there is zero chance CU gets the same amount of money it would get if they made Nike compete with offers from UA and Addidas. I could see negotiating with Nike for another short term extension if RG thought the football and basketball teams were about to make some splashes. After all, it would increase CU's brand recognition and allow for a competitive process later.

Even the best negotiators can only do so much if you limit what strategies they can use, and negotiating with only Nike is definitely making the business staff fight with both hands tied behind their backs.

 

[SpacemanSpiff]

I hope items 2 and 3 from Howell are wrong. I can't put enough emphasis on how big of a mistake it is to just negotiate with Nike on a longer term extension. These markets don't stay hot like they are now for long periods and there is zero chance CU gets the same amount of money it would get if they made Nike compete with offers from UA and Addidas. I could see negotiating with Nike for another short term extension if RG thought the football and basketball teams were about to make some splashes. After all, it would increase CU's brand recognition and allow for a competitive process later.

Even the best negotiators can only do so much if you limit what strategies they can use, and negotiating with only Nike is definitely making the business staff fight with both hands tied behind their backs.

Dude. Seriously? Do you think a long term extension with Nike would be done without first having discussions with the other options? That seems like negotiating 101.

 

[CitizenKane]

Dude. Seriously? Do you think a long term extension with Nike would be done without first having discussions with the other options? That seems like negotiating 101.

Wasn't my information that said CU was negotiating with Nike on a long term extension. You'll note that there isn't any mention of them negotiating with any of the others. From a legal perspective, the AD isn't required to talk to anyone else. I would hope that RG wouldn't do this....but given my knowledge of the personalities involved, it wouldn't surprise me. Plus there is a big difference between having some informal conversations to gauge interest and actually fully opening yourself to offers. IMHO, CU should fully open itself up to offers.

 

[Buffnik]

I don't think Maryland is a market comp at all. It's not that they are not a good comp for us; they aren't a good comp for anyone, for the same reason that Oregon isn't a good comp for anyone. There is no way Oregon signs with anyone but Nike, not because Nike offers them the most money, but because so much other money is tethered to Nike. Similarly, there is no way Maryland signs with anyone but Under Armour, not because UA offers them the most money, but because so much other money is tethered to UA.

ASU is probably a decent market comp though - $4mm/year.

So let's take that as baseline.

How much above that number are you going to be really impressed with RG?
How much below that number are you going to start doubting his negotiating skills?

I agree. Maryland is an outlier. They're the home base flagship program for UA. They're like Oregon for Nike going back to when UO sucked and Knight first started investing.

ASU is a decent comp. Similar prestige. Bigger school and market, but also in a divided state that has 2 P5 programs which negatively impacts ASU's reach a bit more than CU having 2 significant G5s in its state.

 

[CUFan]

Whatever makes the recruits happy. They're the ones that seem to care so much about how they look.

 

[SpacemanSpiff]

Wasn't my information that said CU was negotiating with Nike on a long term extension. You'll note that there isn't any mention of them negotiating with any of the others. From a legal perspective, the AD isn't required to talk to anyone else. I would hope that RG wouldn't do this....but given my knowledge of the personalities involved, it wouldn't surprise me. Plus there is a big difference between having some informal conversations to gauge interest and actually fully opening yourself to offers. IMHO, CU should fully open itself up to offers.

We suck if we don't explore other offers before signing a long term deal with anyone.

 

[Buffnik]

I think RG said something in one of his interviews about the plan being to extend with Nike. We don't have rep any more, but if someone can find the quote I bet I could get Burrito to hump your leg at a Sackygate in thanks.

 

[azbuff]

CU should be in the 4-5 million/year range. 6 million or more per year would get RG an A in my book. Maryland is a bad comp (noted by Skibum). ASU is pretty close. The advantages and disadvantages between CU and ASU differ, but they more or less even out in terms of apparel deals (IMO). One factor overwhelmingly in CU's favor is that any apparel company can make aesthetically appealing gear utilizing our color scheme. Good luck with the eggplant and mustard of ASU.

 

[onealcd]

CU should be in the 4-5 million/year range. 6 million or more per year would get RG an A in my book. Maryland is a bad comp (noted by Skibum). ASU is pretty close. The advantages and disadvantages between CU and ASU differ, but they more or less even out in terms of apparel deals (IMO). One factor overwhelmingly in CU's favor is that any apparel company can make aesthetically appealing gear utilizing our color scheme. Good luck with the eggplant and mustard of ASU.

That's why half their **** is all black now lol

 

[patebuff]

Get the biggest deal you can get. There is no loyalty here and not sure I understand the Nike love affair some have.

 

[FLounder]

Get the biggest deal you can get. There is no loyalty here and not sure I understand the Nike love affair some have.

There is somewhat of a loyalty thing though.....

 

[azbuff]

I used to be in the stay with Nike forever crowd, but adidas and UA have made huge strides both in terms of quality of equipment and appeal to high school aged and under kids. I'd be willing to give Nike a very slight discount for continuity purposes but not much. Michigan was with them forever too but had no qualms leaving for adida$.

 

[FLounder]

I used to be in the stay with Nike forever crowd, but adidas and UA have made huge strides both in terms of quality of equipment and appeal to high school aged and under kids. I'd be willing to give Nike a very slight discount for continuity purposes but not much. Michigan was with them forever too but had no qualms leaving for adida$.

Michigan is now a Jordan brand(Nike).

 

[azbuff]

Okay, but they were one of if not the first school wearing the swoosh on their uniforms and switched to adidas. Now they're back with a Nike-sub, which just proves my point - loyalty to multinational corporations is kind of a ridiculous concept.

 

[buff4bcs1985]

Could CU get Jordan Branded?

 

[newkid]

UW prob will. After Cal left, they offered it to UCLA as the only west coast bball Jordan brand. They need someone out west to have it.

 

[SuperiorBuff]

Could CU get Jordan Branded?

You think he'd hold still?

 

[BuffaloSoldier76]

I wish I could share in everybody's wild optimism as to our worth in the market.
ASU is not a good comparable for CU.
ASU in 2014 had 62,100 undergrads enrolled. CU in 2014 had 39,100 undergrads enrolled. (More eyes = more merchandise sales opportunities)
In this century, ASU is 111-90 on the football field. CU since 2000 is 77-122.
In that time frame, ASU has been to 11 bowl games, including this year. CU, as we all know, has only been to 5...most recently in 2007.
Last year, ASU had attendance of 368,985 at their 7 home games. CU had 302,584 in 7 games in Colorado (including the 66,253 vs CSU in Denver).
Arizona may be a state divided, but there are still 1.4 million more people there than what Colorado currently has.
Does CU bring more eyes to a shoe brand than ASU based on the above very tangible measures? Not a chance.

If you factor in basketball, yes that might give us somewhat of an edge, but ASU also hired a hot national coach in Bobby Hurley that is going to bring more attention to their basketball program (the Worldwide Leader loves Duke alums).

If Rick George is able to get CU a deal at $3 million per year, I will consider that a big win. If he can get us more than that based on where we stand in the pecking order of P5 schools, that will be gravy. Washington State just closed their deal with Nike last year at $2.2 million per year (read about it here). In the past 15 years, we're certainly closer in competitive comparison to them than to ASU. We have a better donor base, better location, and better history than that program. That should yield a slightly better contract than they got, I hope. Deciding that ASU's contract should be the baseline for what we get as the level you'd be happy with is really setting yourself up for disappointment and sadness, and a false reason to get outraged and indignant on the Internet.

 

[SINKRATZ]

I wish I could share in everybody's wild optimism as to our worth in the market.
ASU is not a good comparable for CU.
ASU in 2014 had 62,100 undergrads enrolled. CU in 2014 had 39,100 undergrads enrolled. (More eyes = more merchandise sales opportunities)
In this century, ASU is 111-90 on the football field. CU since 2000 is 77-122.
In that time frame, ASU has been to 11 bowl games, including this year. CU, as we all know, has only been to 5...most recently in 2007.
Last year, ASU had attendance of 368,985 at their 7 home games. CU had 302,584 in 7 games in Colorado (including the 66,253 vs CSU in Denver).
Arizona may be a state divided, but there are still 1.4 million more people there than what Colorado currently has.
Does CU bring more eyes to a shoe brand than ASU based on the above very tangible measures? Not a chance.

If you factor in basketball, yes that might give us somewhat of an edge, but ASU also hired a hot national coach in Bobby Hurley that is going to bring more attention to their basketball program (the Worldwide Leader loves Duke alums).

If Rick George is able to get CU a deal at $3 million per year, I will consider that a big win. If he can get us more than that based on where we stand in the pecking order of P5 schools, that will be gravy. Washington State just closed their deal with Nike last year at $2.2 million per year (read about it here). In the past 15 years, we're certainly closer in competitive comparison to them than to ASU. We have a better donor base, better location, and better history than that program. That should yield a slightly better contract than they got, I hope. Deciding that ASU's contract should be the baseline for what we get as the level you'd be happy with is really setting yourself up for disappointment and sadness, and a false reason to get outraged and indignant on the Internet.

You're ignoring the fact that 60% of ASU grads go on to become either strippers or DJ's. They spend most of their disposable income on antibiotics and pregnancy tests, they don't buy Nike ASU gear.

 

[azbuff]

I wish I could share in everybody's wild optimism as to our worth in the market.
ASU is not a good comparable for CU.
ASU in 2014 had 62,100 undergrads enrolled. CU in 2014 had 39,100 undergrads enrolled. (More eyes = more merchandise sales opportunities)
In this century, ASU is 111-90 on the football field. CU since 2000 is 77-122.
In that time frame, ASU has been to 11 bowl games, including this year. CU, as we all know, has only been to 5...most recently in 2007.
Last year, ASU had attendance of 368,985 at their 7 home games. CU had 302,584 in 7 games in Colorado (including the 66,253 vs CSU in Denver).
Arizona may be a state divided, but there are still 1.4 million more people there than what Colorado currently has.
Does CU bring more eyes to a shoe brand than ASU based on the above very tangible measures? Not a chance.

If you factor in basketball, yes that might give us somewhat of an edge, but ASU also hired a hot national coach in Bobby Hurley that is going to bring more attention to their basketball program (the Worldwide Leader loves Duke alums).

If Rick George is able to get CU a deal at $3 million per year, I will consider that a big win. If he can get us more than that based on where we stand in the pecking order of P5 schools, that will be gravy. Washington State just closed their deal with Nike last year at $2.2 million per year (read about it here). In the past 15 years, we're certainly closer in competitive comparison to them than to ASU. We have a better donor base, better location, and better history than that program. That should yield a slightly better contract than they got, I hope. Deciding that ASU's contract should be the baseline for what we get as the level you'd be happy with is really setting yourself up for disappointment and sadness, and a false reason to get outraged and indignant on the Internet.

ASU signed their deal long before Hurley was hired. So his hire has no impact on the numbers. ASU has been dog**** in basketball forever. ASU averaged 10,000 more per football game with a massive student body and top-10 aspirations. That isn't a great distinction for them either.

WSU has never been the number one athletic program in its own state. If RG can't get at least 3mm, he has failed badly.

 

[BuffaloSoldier76]

You're ignoring the fact that 60% of ASU grads go on to become either strippers or DJ's. They spend most of their disposable income on antibiotics and pregnancy tests, they don't buy Nike ASU gear.

You know damn well that they steal those pregnancy tests, and the antibiotics are only like $4 with a discount plan at Walmart. Plenty of leftover dollar bills (stripper-scented or coke-rolled variety) to spend on their NEW Adidas Forks Up gear.

 

[BuffaloSoldier76]

ASU signed their deal long before Hurley was hired. So his hire has no impact on the numbers. ASU has been dog**** in basketball forever. ASU averaged 10,000 more per football game with a massive student body and top-10 aspirations. That isn't a great distinction for them either.

WSU has never been the number one athletic program in its own state. If RG can't get at least 3mm, he has failed badly.

The Hurley hiring makes them more desirable now. His hiring did not have an impact on the numbers, but neither did basketball at all, frankly.
The CSU game is an asterisk on our attendance figures as it was easily the most attended, and at least 2/5 of attendees were from CSU. The attendance gap is larger than you think.
WSU is definitely second-fiddle (maybe 3rd to Gonzaga) in the state of Washington. Doesn't mean they aren't a better comparable for us at this moment in time than ASU. Don't misinterpret me there. I'm saying we SHOULD be slotted higher than WSU, but if they are looking at a combination of recent history and eyes on the program we will definitely fall short of ASU. If we get more out of a shoe company than ASU got from Adidas I'll be totally ecstatic, but I'm not going to think any less of Rick George as a leader or negotiator if the number falls short of that.
If they switch us to Russell Athletic, we riot.

 

[CUFan]

We're the only game in town in Colorado (at the college level) and have an energetic, healthy and growing population that loves athletic gear. Sell them on that.

 

[Shldr2Shldr]

We're the only game in town in the Mountain Time Zone (at the college level) and have an energetic, healthy and growing population that loves athletic gear. Sell them on that.

FIFY

Seriously only 2, maybe 3, recognizable name programs in the rockies.

 

[FLounder]

All I'm saying is with RG in charge, I expect Colorado to become on par with Ohio State, Michigan, Florida, and the stanfords of the world in Olympic sports. Boulder can become an Olympic sport haven, Only with more and better world class facilities though.

 

[Buffnik]

All I'm saying is with RG in charge, I expect Colorado to become on par with Ohio State, Michigan, Florida, and the stanfords of the world in Olympic sports. Boulder can become an Olympic sport haven, Only with more and better world class facilities though.

I agree with this. I mean, they put the actual Olympic training in this state for a reason.

 

[FLounder]

I agree with this. I mean, they put the actual Olympic training in this state for a reason.

Right?? Those facilities out in Colorado Springs(?) are what 12 years old? Imagine getting outside funding to make Boulder the new Olympic training grounds. That would make Knight and Oregon drop to their knees.

 

[CitizenKane]

I wish I could share in everybody's wild optimism as to our worth in the market.
ASU is not a good comparable for CU.
Does CU bring more eyes to a shoe brand than ASU based on the above very tangible measures? Not a chance.

Those numbers are exactly what I would expect Nike, Addidas or UA to bring to the table if they were negotiating without an open competition. On the surface they are tough to overcome, but they don't account for the change in the market during the nearly two year period since ASU executed their agreement. Nor the fact that ASU can't draw consistent ratings within its own market (In part because of U of A and in part because the State of Arizona doesn't seem to care much about college football).

Here is a brief comparison of number of households watching similar games from last year:
CU vs Washington State: 489 thousand households
ASU vs Washington State: 384 thousand households

CU vs Oregon: 2.231 million households
ASU vs Oregon 1.519 million households

CU vs USC: 1.374 million
ASU vs USC: 2.144 million

CU vs UofA: 288 thousand households
ASU vs UofA: 393 thousand households (really a rivalry game and this is it?!?!? Look up the TV numbers for the regionally broadcast CU vs CSU).

As you can see in 4 nationally televised games against the same opponents ASU had 4.440 million housholds, CU had 4.382 million households. You probably already know this, but CU draws better TV ratings for hoops than ASU does. So basically the numbers that count most are a wash, even while the CU football program is down as low as it can possibly go and ASU's has done about as well as it ever has. Of course, since CU is down it didn't get as many nationally televised games as ASU, but some of CU's regional games drew much better than ASU's nationally televised games. Basically CU would be asking Nike, UA or Addidas to take a very small risk for a very big possible upside.

If CU opened this thing up there isn't a doubt in my mind they would get as much or more $ than ASU. Without opening up the competion they could just as likely fall victim to numbers quite similar to your own.

 

[sackman]

Meh- I remember that a lot of ASU games were televised at like midnight. Not a good comparison, IMO.