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Jun 29, 2020
9:22:46am
BYUMizzou Former User
Here's the publicly available info on BYU's Nike contract
Nike has 3 types of contracts with colleges. The top tier colleges get $X million in product each year plus $Y in cash from Nike. Michigan State is this type of school. They get $3,000,000 in product (as of 2016) and $400,000 in cash for their basketball coach, $100,000 in cash for their football coach, and another $400,000 in cash for their athletic department generally.

Mid-level schools have a contract for $X million in product, but the schools can convert product into cash at a 3:1 ratio. For example, if your contract gives you up to $3 million in product, but you only use $2.7 million of product, then you have $300,000 left over. You can convert the $300,000 of product to $100,000 of cash. Illinois is a school with this type of contract.

The lowest level Nike schools get product only.

The top 20 Nike contracts (again as of 2016) were:

1. Texas - $3.8M product, $9M cash
2. Michigan $5.6M Product/ $4.8M cash
3. Ohio State $4.7 product / $1.5 cash
4. Oklahoma - $3.75/$1.4
5. OK State -$3.75M / $750K cash
6. Uconn - $3.1 equipment, $1M cash for arena construction, $1M in guaranteed royalty payments, $375K other cash
7. LSU - $3.3M equipment/$1M cash
8. FSU - $2.8M/$1.4M
9. Illinois - $4M product w/product convertible to cash on 3:1 basis (see above)
10. Michigan State (see above)

11-15 are NC, GA, TN, Alabama, & Washington. All these schools get around $2.5M in product and $500K in cash.

Schools 16-20 is where the cash payments start falling off. The schools are: Kentucky, WV, Florida, Mizzou, and Virginia. Mizzou, for example, gets $3M in product and $150K in cash. Florida (#18) is a $3.2M product deal with no guaranteed cash, but unused product can be converted to cash at a 3:1 basis.

Most schools in the 20-30 rank get some cash, but this is where you start seeing deals with only merchandise show up. For example, Minnesota has the #25 Nike deal, and they get $2.25M in product and no cash. Old Miss is #29, and they are a product only (no cash) deal for $2.05M.

So where does BYU fall? They aren't listed in the Nike database put together by the Business Journal. This is probably because we're a private school and not subject to Sunshine Law requests. From the article posted when BYU renewed their Nike contract, however, some details were given to local media sources. The KSL article says BYU's merchandise value doubled, and BYU is also guaranteed cash payments for each of their athletic teams. It also said that the new deal includes merchandising royalty payments that could go as high as $10M per year. I'm sure the $10M is a pie in the sky number, so I'm not using that as any basis for anything.

It's clear, however, that BYU is a hybrid type contract, similar to Uconn, where we get product, cash, and royalty payments. Keep in mind that BYU was the first ever Nike school. We have the longest running contractual relationship with Nike (even longer than Oregon), and Phil Knight and L.Edwards were close personal friends. You can guess where BYU falls in the spectrum, but its not unreasonable to think that BYU is a top 20 school pulling in $3M+ in product, cash and royalty payments.

We're clearly in a higher tier than Florida (18) , MN (25), and Ole Miss (29), all who have no guaranteed cash.
Originally posted on Jun 29, 2020 at 9:22:46am
Message modified by BYUMizzou on Jun 29, 2020 at 9:33:55am
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