Under Armour To End Its $280 Million Deal With UCLA
UCLA’s Dan Guerrero (left) and Under Armour’s Kevin Plank (right) holds up Under Armour UCLA apparel after announcing the record breaking deal in 2016.
In 2016 Under Armour set records with their $280 million dollar deal with UCLA. Fast forward four years, and they have announced they want to break the contract early. The original contract was slated to last 15 years and included a $15 million upfront payment to UCLA, $11 million annually to UCLA for marketing, $2 million towards the improvement of athletic facilities, and about $7 million dollars in apparel each year.
The decision to break contract comes from a belief on Under Armour’s part that UCLA has not met the marketing requirements of their contract. Furthermore, their agreement allows Under Armour to do exactly that. However, in a statement released to the press, retiring athletic director Dan Guererro stated that UCLA is not going to back down without first exploring all of their options to continue the contract.
Both UCLA and Under Armour are currently experiencing financial troubles. UCLA already had to take a loan with interest from the university to cover an almost $19 million dollar deficit from their 2019 season. Under Armour on the other hand is experiencing first hand the struggles of most businesses during the pandemic. Their sales dropped over 50% from the same time last year.
Martin Jarmond is set to replace Guererro as athletic director come fall, and he is going to have his hands full dealing with the fallout of the pandemic and negotiations with Under Armour.