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IU to get 81% hike in apparel revenue in Adidas deal

Navigate Research - Wednesday, August 19, 2015
IU to get 81% hike in apparel revenue in Adidas deal

via Indy Star

BLOOMINGTON — Indiana has extended its apparel contract with Adidas in a deal that will nearly double the company's annual payment to the Hoosiers from $3.7 million to $6.7 million, Director of Athletics Fred Glass confirmed to The Star on Monday.

According to IU, the deal worth $53.6 million over eight years is one of the five richest publicly known apparel deals in college athletics.

The deal will also help the Hoosiers ensure that "crimson and cream" are the same hues across all 24 IU sports.

According to a database compiled by the Portland Business Journal, that annual payout would rank the Hoosiers third nationally in apparel deals for the 2014-15 academic year, behind Michigan and UCLA.

"Adidas fits us well," Glass told The Star. "We've had a long relationship with them."

IU and Adidas have been partners in apparel over numerous spells in the department's history, their current deal dating to 2004. This extension will ensure that relationship continues through at least 2024, and it makes Indiana one of Adidas' most high-profile customers, after Michigan and Notre Dame defected for competitors in the last two years.

The deal will increase Adidas' annual payment to IU by 81 percent, allocate extra funds both parties can use for "co-marketing" and provide alternate uniforms and helmets for Indiana's football program. Adidas will also provide an optional alternate uniform for the Hoosiers' men's basketball program each year.

Glass said every IU program "will receive more apparel as a result of this deal."

Additionally, the Germany-based company will conduct a "full branding audit" of IU's uniforms and apparel, to ensure greater consistency in color and design.

While Glass emphasized that the audit "does not portend any significant changes," he said he is hopeful it can create a more uniform look within his department.

"I think we've improved on that over the years, but we're going to try and do that even better," Glass said. "Trying to get the colors right, we want to make sure we have that lined up."

As collegiate apparel deals have exploded financially in recent years, they have come to illustrate the status and power of individual programs' brands. Michigan's record-breaking 15-year, $169 million contract with Nike is the latest example.

Wanting to ensure due diligence in replacing the contract that expires after this academic year, Indiana reached out to Navigate Research, a sports and entertainment research and analysis company, to give the department a better idea of its relative value in the apparel market.

"They were invaluable in helping us to understand what the value (of IU's brand) was, and some things we could do to potentially increase the value of our association," Glass said. "I think having Navigate helped us understand the value of the brand, kind of literally and figuratively."

While Indiana was willing to listen to offers from Nike and Under Armour, the extension with Adidas — on improved terms — won out. The deal will further expand annual revenues, which climbed north of $84 million in Bloomington last year.

"Indiana, we like to pride ourselves on tradition, stability and a classic look," Glass said. "And I think all those things are really where Adidas fits in the marketplace."

Follow Star reporter Zach Osterman on Twitter: @ZachOsterman.