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2015 Uniforms

Utah going with the all whites this weekend at Oregon.

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I feel like I should know this already, but can someone explain to me exactly how the uniform thing works in terms of who foots the cost?

You always hear it, but with all the new uniform combinations, I'm hearing the whole 'they keep raising tuition so the football team can have fancy uniforms' rigamarole more often. Obviously that's not the case, but do we pay for all this stuff, does Nike, or do we split the costs?
 
Alfred91 said:
I feel like I should know this already, but can someone explain to me exactly how the uniform thing works in terms of who foots the cost?

You always hear it, but with all the new uniform combinations, I'm hearing the whole 'they keep raising tuition so the football team can have fancy uniforms' rigamarole more often. Obviously that's not the case, but do we pay for all this stuff, does Nike, or do we split the costs?
Click to expand...

The apparel company pays for it. Its part of what they are required to provide the team by the contract they sign.

You hear about a team getting a 200mil contract for 10yrs with an apparel company. That is not all straight up cash. That also includes value of all the gear they provide the athletes.

At least thats how I understand it.
 
That's what I thought.

I have to wonder though - what's in it for Nike? I mean, is it all just the visibility, or do they expect to recoup the costs via sales of apparel?

I could see some schools' fanbases easily buying $200 million of gear in 10 years, but sadly I don't think CU's one of them.
 
Alfred91 said:
That's what I thought.

I have to wonder though - what's in it for Nike? I mean, is it all just the visibility, or do they expect to recoup the costs via sales of apparel?

I could see some schools' fanbases easily buying $200 million of gear in 10 years, but sadly I don't think CU's one of them.
Click to expand...

Apparel sales, and advertisement. Nike really created this uniform phenomenon, so they definitely found a way to profit on it. I mean you look at the uniforms out there and Nike, by far, has the more popular ones. The consumer mindset when viewing uniforms of "Nike makes cool stuff, Adidas' stuff is so ugly" creates a buyers preference when they are purchasing shoes or work out gear.
 
Ah - makes sense.

BTW - does Under Armour still do Maryland's stuff? Because they make Oregon look classy.
 
They aren't going to sell $20 Million in CU gear but it's all part of a concept. If they can get most of the schools on board they then can be sure no matter who goes up or down that they have the majority of the schools who are winning.

They want the HS kids to associate Nike with winning. 400,000 HS football players in the country each year almost all buying cleats as well as their other athletic shoes and casual shoes along with clothing, etc. They want Nike to be the preferred brand for these kids in high schools and past it.

A long but interesting breakdown of Nike numbers. They are a marketing company, not a manufacturer. they don't make the products they sell and the majority of their cost are not for the product but rather marketing and distribution expenses. What they put into a school like CU is just a very small part of this expense.


Here is some information from Nike's FY2012 year end earnings release. Gross margin for the year declined 220 basis points (2.2 percentage points) to 43.4%. Of course gross margins vary widely across different types of products, or even different styles of similar products, but that means that on average a hypothetical pair of shoes Nike sold for $75 during FY12 had a landed cost of about $42.45 (as opposed to $40.80 during FY11).

Fiscal 2012 Income Statement Review
  • Revenuesfor NIKE, Inc. were up 16 percent to $24.1 billion, up 14 percent on a currency neutral basis.
    • NIKE Brand revenues rose 15 percent excluding the impact of changes in foreign currency, driven by growth in all geographies, key categories and product types. NIKE Brand wholesale revenues increased to$17.4 billion, 14 percent higher than the same period last year on a currency neutral basis. NIKE Brand Direct to Consumer revenues grew 21 percent to $3.5 billion due to 13 percent growth in same store sales and new door expansion. As of May 31, 2012 the NIKE Brand had 557 stores in operation as compared to 487 a year ago.
    • Revenues for Other Businesses grew 11 percent with no significant impact from changes in currency exchange rates, driven by growth across most businesses.
  • Gross margin declined 220 basis points to 43.4 percent, primarily driven by higher product costs, as well as investments in our digital business, an unanticipated customs assessment in an Emerging Markets territory related to imports that occurred during four previous fiscal years, and higher discounts on close-out sales. These factors more than offset the positive effects of price increases, lower air freight costs, growing sales in our Direct to Consumer operations and ongoing product cost reduction initiatives.
  • Selling and administrative expenses grew at a slower rate than revenue, up 11 percent to $7.4 billion. Demand creation expenses were up 11 percent to $2.7 billion due to an increase in sports marketing expense, marketing support for key product initiatives, investments in retail product presentation for wholesale accounts and marketing support for the European Football Championships and Summer Olympics. Operating overhead expenses increased 11 percent to $4.7 billion due to additional investments made in our wholesale and Direct to Consumer businesses.
  • Other expense, net was $54 million for the fiscal year, primarily comprised of net foreign currency exchange losses and a $24 million charge related to NIKE Brand’s Western Europe restructuring, partially offset by certain non-operating items. For the year, we estimate the year-over-year change in currency related gains and losses included in other expense, net, combined with the impact of changes in currency exchange rates on the translation of foreign currency-denominated profits, did not have a significant impact on pretax income.
  • The effective tax rate was 25.5 percent compared to 25 percent for the same period last year. The increase was due to changes in tax reserves, partially offset by a reduction in the effective tax rate on operations outside of the United States.
  • Net Income increased 4 percent to $2.2 billion and Diluted earnings per share increased 8 percent to$4.73, reflecting higher net income and a 3 percent decline in the number of weighted average diluted common shares outstanding
 
Alfred91 said:
Ah - makes sense.

BTW - does Under Armour still do Maryland's stuff? Because they make Oregon look classy.
Click to expand...

I have seen a couple of Oregon sets this year that looked like somebody was eating green highlighter pens and then threw up on the screen.
 
MtnBuff said:
I have seen a couple of Oregon sets this year that looked like somebody was eating green highlighter pens and then threw up on the screen.
Click to expand...

Just another gimmick from a school that has made their name from gimmicks on and off the field.
 
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