The Deal:
Nike Inc. re-signs as the clothing and equipment sponsor for 20 intercollegiate athletic teams at Florida State University.
Estimated Value: $20 million-plus in products, cash and
services.
Length: Seven years, retroactive to Aug. 1, 1998, through July 31, 2005; renegotiated from original $6 million, five-year deal signed in 1995.
Deal Makers:
Kit Morris, director of college sports marketing for Nike; Dave Hart, athletic director, Florida State University; Kim Record, associate AD, FSU; Scott Kull, director of marketing/promotions, FSU.
Key Elements:
Florida State University receives from Nike:
$5.6 million cash payment over seven years for exclusive rights.
$2 million (retail value) in equipment, including shoes and uniforms, per year.
$1 million to Seminole Boosters, athletic department's fund-raising group, for capital campaign for improvements to athletic facilities.
$1.52 million to FSU Foundation, to be spent for academics at discretion of the university president.
Annual bonuses for coaches, including: football coach Bobby Bowden, $275,000 (increased from $225,000); men's basketball coach Steve Robinson, $165,000 ($150,000); women's basketball coach Sue Semrau, $15,000 (not covered in previous deal); $60,000 shared by other coaches, including soccer ($10,000), softball ($5,000) and volleyball ($5,000) head coaches, who will be compensated by Nike for the first time.
$50,000 to underwrite university's celebration of 30 years of intercollegiate women's sports.
Two internships for Florida State students at Nike headquarters.
Nike receives:
Exclusive uniform sponsorship for 20 sports.
Skybox in football stadium and basketball arena.
Tickets to selected FSU athletic events.
Background:
This deal is considered to be the richest package between an apparel company and a school. Nike has a $9.25 million, five-year deal with Ohio State that expires in 2000. The company signed a deal with North Carolina in 1997 for $11.1 million over five years. Last fall, Nike signed a $7 million, five-year deal with the University of Arizona. Nike also has a contract with the University of Florida for $9 million over five years, but that deal includes only the football and men's and women's basketball programs.
There's probably more money coming soon for FSU. Negotiations with Host Communications Inc. have just started for a new media-rights contract.
Analysis:
There's no question this is a deal for an elite property. Nike not only rips up an existing deal but also triples the payments to Florida State. The value to Nike comes from being associated with a top athletic program. Florida State teams, especially football, get on television, and that means a lot of airtime for Nike's swoosh. Since the deal includes almost no other exposure opportunities for the company, that must be all Nike needs to make this deal pay out.
