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Marketing and Sponsorship

Lucky Horseshoe: Ohio State, Nike Agree To Record 15-Year, $252M Extension

Ohio State's 20-year sponsorship deal with Nike "has grown by 15 more years" and $252M, extending the partnership, which was slated to end July 31, 2018, to '33, according to Mary Mogan Edwards of the COLUMBUS DISPATCH. Along with gear and cash for NCAA teams, "it means scholarships, internships and Nike swag for students who aren’t athletes." Club sports will "get a discount on uniforms and equipment." Expanding contract benefits "beyond the athletic department has been a goal" of AD Gene Smith for years. Smith credited OSU Senior VP & CFO Geoff Chatas with "helping negotiate a better deal after Nike approached the university about an extension" in '14. Smith said that a "change in negotiators for Nike" -- and a CFP national football championship for OSU -- also helped. During negotiations, Smith and Chatas "kept an eye on the corporation’s talks" with Texas, which signed a 15-year, $250M deal in October. Smith said, "Texas was our biggest benchmark. We knew their contract would be large, but we felt we needed to be larger than theirs. We felt that the size and breadth of Ohio State justified the biggest contract." Edwards notes most of the new provisions in OSU's contract "won’t take effect" until '18, but the deal includes $22.5M in cash and $5M in products up-front (COLUMBUS DISPATCH, 1/15). In Columbus, Doug Buchanan reported the extension includes $112M in Nike products, $15M in marketing support, and at least $103M in cash, "not including royalty income that's expected to bring the total" to $116M (BIZJOURNALS.com, 1/14).

NUMBER ONE SPOT: Smith said that Nike "approached Ohio State to open discussions" in '14. Smith said that OSU "pondered talking to other apparel companies, which by contract couldn't have happened" until '17, but the school "liked what it was hearing from Nike." In Cleveland, Doug Lesmerises notes that with the size of OSU's athletic department, "with 36 sports, and its alumni and fanbase, Smith felt Ohio State deserved the top spot" in deal value. Smith said that OSU is the "most televised football program in the nation over the past 25 years." Smith said that Nike "broke some sales records with merchandise after" OSU football's '14 national championship. Smith: "We were deserving in this deal to be No. 1 in the country" (Cleveland PLAIN DEALER, 1/15).

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