As is the case with many things involving money across college athletics, the value of apparel deals is getting just stupidly big. Like $18.7 million dollars per year stupidly big. Even a school such as Maryland is raking in $4.35 million every year in cash and those gaudy monstrosities Under Armour makes them wear.
Just like television revenues, apparel contracts (which, as in the case of Maryland, usually involve a yearly payout of cash plus a product allowance) are big business for NCAA institutions looking to keep up with the Joneses.
For schools like Washington State, getting as much money as possible out of these contracts is crucial. Already struggling because of their remote location and small donor base, the school has to maximize revenue in every way possible, especially since it finds itself currently in a $13 million yearly budget hole.
WSU's current apparel deal with Nike pays the school, in cash and apparel allowance, roughly about what you'd expect for an institution of its size: $2.2 million per annum, which includes $200,000 in cash and $2 million in an apparel allowance. (CougCenter obtained the contract via a Freedom of Information Act request.) Despite how far it is behind UCLA and Cal, that deal actually doesn't put WSU as far behind the eight ball right now as you'd think.
This contract, though, is a problem. Just maybe not in the way you think.
Although we'd always love more money, the problem isn't today. And it's that it's worth just $2.2 million to WSU every year.
It's with the future.
It's that the deal runs through 2024-2025.
Yikes. In 2020, the school gets an ever so slight bump up to $2.4 million per annum but by the time the end of the contract rolls around in a little short of a decade, that will probably look like a mere pittance to compared to what schools, even of similar size and importance, are earning.
This rolls back to something we talked about last month in regards to the conference revenues: this is an inadvertent mistake on the part of Bill Moos and the school to sign what they thought was going to be a good deal in the long term. Even when Moos signed the extension of this deal last summer -- it was originally scheduled to end after 2016-2017 -- it would've been hard to predict UCLA raking in almost $19 million a year from Under Armour. There's just no way to foresee that.
But, much like the Pac-12 media rights deal that looked pretty dang good at the time, this deal just doesn't look good anymore going forward. Countless apparel deals will be coming up for renewal in the next few years and Nike, undoubtedly, will be paying out substantially higher figures than they are right now. Coupled with the languishing television dollars, WSU is (again, as it has throughout its history) being put in a bad position where the school isn't getting all the revenue it can.
Maybe the worst part of this contract is the bonuses WSU gets for specific athletic accomplishments. Win a Pac-12 championship this year? $1,000. That's it. Win a national championship? $1,000.
APPEAR IN A FREAKING BCS* BOWL: $500. Five. Hundred. Dollars. My grandparents paid me more to mow their pasture once a week for the spring and summer.
*Yes, the contract says BCS. Maybe Nike can get out of paying the $500 on a technicality.
So where does WSU go from here?
It's kind of hard to say. The deal doesn't expire for another nine years so WSU's leverage to renegotiate a deal they signed last summer is roughly nil. They certainly can't just shred the deal, burn the paper, and then plug their ears and close their eyes before running off. Nike sure isn't obligated to just throw more money or a higher apparel allowance WSU's way because, even if you're a multi-national corporation with billions in in yearly revenue, you're not just going to fritter money away.
For now, WSU is probably just going to have to languish with this contract. They have no leverage to renegotiate and Nike has no reason to. This is going to leave WSU even further behind when it comes to revenues as compared to their Pac-12 and other Power 5 conference counterparts once they all start renegotiating their deals.
Aside: we're not going to be posting the entirety of the contract here like we normally would (there's a confidentiality clause that, even with this being subject to public record, scares the bejesus out of me), but there's a note in the margin next to paragraph 8a that specifically allows Mike Leach to wear Dockers, not Nikes. Just in case you thought he couldn't be more of a dad.