The Northwestern athletic department might be without a sponsor when its current 5-year agreement with adidas expires in June, NU Director of Athletics Rick Taylor said Tuesday.
Taylor blamed the economic downturn for limiting the number of corporations able to strike a deal.
Taylor said Nike is the only remaining company that might sponsor the team, after adidas told him it would not be interested in continuing its relationship with NU when the contract ends. Under the terms of the marketing partnership, adidas outfitted all NU sports teams with footwear, apparel and accessories.
But Taylor said he doesn’t “hold great hope” that an agreement will be reached with Nike given the current economic slowdown.
“This is probably the worst time to be trying to get a continuation of a deal like we had,” Taylor said. “There is nobody else in the business right now besides Nike. Everyone else has pulled back.”
Nike’s competitors are exiting the college sponsorship market — Reebok will shell out $250 million in a licensing deal with the National Football League. Although adidas recently signed an $8.3 million deal with the University of Wisconsin, economic conditions have made the sportswear company more cautious.
Taylor declined to say how much NU’s expiring deal with adidas was worth.
Jim Andrews, editorial director of IEG Network’s Sponsorship Report, a biweekly newsletter that tracks the sponsorship business, said he understands the companies’ conservative approaches.
“Companies are saying they are very uncertain about what the near-term future will bring,” Andrews said. “It boils down to negotiations being tougher now than if the deal expired two years ago. It is not the best year for having a deal end.”
If the athletic department is unable to find a sponsor, all equipment and apparel would have to be funded from NU bank accounts.
“We got real fat in the last years and had all our equipment given to us,” Taylor said. “We had a wild expansion. But now we might have to go back to the way it was.”
Although Taylor continues to negotiate with Nike and has visited its corporate headquarters, he said the Oregon-based shoe giant has not been immune to the economic troubles, despite its efforts to remain active in the college sponsorship market.
“They are going through the same problems as everyone else,” Taylor said. “We have to go into this with a great deal of flexibility. It’s not going to work if we are hard negotiators. When you are dealing with only one company, you don’t have a lot of leverage.”
Although he wouldn’t confirm if negotiations were ongoing with NU, Nike spokesman Eric Oberman said the corporation’s business outlook has not changed.
“With the downturn in the economy, we need to be cognizant of who we are striking deals with,” Oberman said. “But most of our relationships are over the long haul and last for many years into the future.”
“We will always look at schools we want to start relationships with. If the opportunity is there, we’ll exchange conversations,” he said.
Nike has agreements with almost 200 colleges nationwide, including the University Michigan, Florida State University and Penn State University. It continues to enter into major deals, including an eight-year contract worth more than $28 million signed with the University of North Carolina at Chapel Hill last month.
But Taylor said NU needs to be realistic and emphasize the benefits of its affiliation with the Big Ten.
“We are not in the same class as UNC,” he said. “(NU) snagging a $28 million deal is not going to happen.”
Although the corporate decision-making process is based more on economics than NU’s disappointing football performance this season, NU football offensive guard Jeff Roehl said the team’s lack of consistent success has made it difficult for the university to reach the upper echelon of sponsored schools.
“This is a business world, and if we didn’t live up to expectations this year and they feel like in the falling economy they need to cut back, of course they will look at teams that aren’t performing at the elite level,” said Roehl, a Weinberg senior.
Although companies may be limiting their sponsorships, newsletter editor Andrews said NU may be able to capture a sponsorship agreement if it aims for a low-cost deal.
“There are two ways to look at it. If I were a company, I’d make the argument that NU will not deliver the numbers in students and alumni that buy products or support teams like a state university,” Andrews said. “But I also imagine the cost of a sponsorship with NU is probably a lot less than the bigger schools.”
If a deal were to occur, Taylor said Nike may want to sponsor only the men’s football and basketball teams and create some sort of discount program for other sports to purchase equipment through the company.
“That deal would be a tier below what Michigan and UNC have, but it would certainly be something and above the mid-major schools,” Taylor said.
