UCLA made some unexpected news on Saturday when Ben Bolch of the Los Angeles Times reported that Under Armor is trying to break out of his record-breaking apparel contract he signed with the school in 2016. The Bruins and Under Armor agreed to a 15-year term, $ 280 million contract launched on July 1, 2017, so it’s obviously not close to ending.
This is not something that happens too often so early in a contract, but these are unprecedented times in the midst of the coronavirus pandemic. Under Armor cannot be 100% certain that its logo will appear on UCLA jerseys this fall for an entire season in the worst case scenario of the pandemic worsening, and if football continues as expected, the Bruins have not given the jump under the coach Chip kelly that many expected when it arrived in 2018.
UCLA alumnus and longtime ex-NBA wing Matt Barnes He explained on Twitter that it might not be the worst outcome for the Bruins if Under Armor successfully terminates the deal.
This could be a blessing and a costume. Although losing those $ will hurt, the UA team is crap! By speaking 2, these young athletes want to go to a school that can prepare them to the next level and obtain drug equipment in the process. Personally, I think the @UCLA UA deal has hampered their recruitment
– Matt Barnes (@ Matt_Barnes22) June 27, 2020
While there is little doubt that Nike remains ahead of Under Armor in terms of brand size, recognition and even order of freshness, it is unclear whether UCLA could get a comparable deal on the market now. And that money is difficult to replace, especially during a pandemic. The UCLA deal set a new record: Texas and Ohio State were the two apparel deals, both with Nike, that had been considered the richest in college athletics. Each was worth approximately $ 250 million over 15 years, which equates to just over $ 16 million per year.
If Under Armor ends the deal, it would let the Bruins take a massive hit. UCLA Athletics Department is facing a deficit of approximately $ 19 million from fiscal year 2019, according to a January 24 report from the San Jose (California) Mercury News.
The Bruins managed to generate $ 108.4 million in revenue, but accumulated $ 127.3 million in expenses. Financial figures worsened during the stretch where the soccer head coach Chip kelly He went through a tough first season and former basketball coach Steve Alford was fired.
Those factors created a situation where UCLA recorded a loss for the first time in 15 years. Even in that year, 2004, the Bruins reported a deficit of only $ 164,000.
Soccer and men’s basketball are two main reasons why UCLA is in a financial hole. In fiscal 2018, the university donated $ 12.5 million to buy former soccer coach Jim Mora when he was fired.
In fiscal year 2019, the Bruins paid $ 3.9 million to buy Alford and gave new men’s basketball head coach Mick Cronin a $ 2 million signing bonus. According to the Mercury News reportDonors agreed to help with those purchases, but that will come in incremental amounts over time.
Olympic sports spending has also skyrocketed for UCLA in recent years. During the past two fiscal years, the budget for those two programs has increased by 17 percent or $ 5 million. Increases in travel and coaching salaries contributed to much of that.
