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IU's Adidas deal scores even more than school expected

August 18, 2015
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The eight-year, $53.6 million apparel deal with Adidas that Indiana University announced Tuesday is even more than the school’s athletic director expected to score when school officials started down this road a year ago.

“This deal certainly exceeds my personal expectations,” IU Athletics Director Fred Glass told IBJ.

Glass said his eyes were opened after the school hired Chicago-based Navigate Research last year to do a year-long study of the school’s brand value. Based on the research, IU officials asked for a more valuable apparel deal than they previously thought they could get.

“We wanted to make sure we thoroughly understood the market and didn’t undersell ourselves,” Glass said.

The new deal with Adidas is an extension of the one IU signed with the German-based athletic shoe and apparel company in 2004. It begins July 1, 2016, and will run through 2024. It will increase Adidas’ annual payout to IU a whopping 81 percent—from $3.7 million to $6.7 million annually.

“Every day is a great day to be a Hoosier, but it’s an especially great day when you nearly double the value of the school’s athletic apparel deal,” Glass said. “I’m really ecstatic about this.”

As part of the deal, Adidas will provide IU with a branding audit to ensure a consistent look across all 24 varsity sports. The agreement provides for an annual alternative football uniform, including helmets, as well as an optional alternative uniform each year for men's basketball.

The agreement also includes a marketing commitment where the global footwear and apparel leader will co-brand with IU Athletics in marketing campaigns, social media efforts, and in-store promotions.

While Glass admitted IU’s high-profile men’s basketball team was a big reason for the deal, he said there’s much more to it than that.

“We have 25 national championships [in collegiate team sports],” Glass said. “I’m not picking on Purdue, but by way of comparison to the other major state institution, they have three.

“I’d like to think this deal is reflective of the school’s value across all sports and the entire institution. We have the third-largest living alumni base in the country. We’ve had success in soccer, swimming, track and field, and other sports. Our academics have a strong reputation. All those things count. It’s why a number of organizations want to affiliate with our brand on a number of levels.”

Of course, IU re-entered the marketplace at an ideal time. Adidas, Nike and Under Armour are battling for athletic licensing deals on the collegiate and professional levels nationwide. As a result, the value of collegiate apparel deals has skyrocketed.

This summer, the University of Michigan signed a 15-year, $169 million deal with Nike. Last year, the University of Notre Dame signed a 10-year deal with Under Armour that sports marketers believe is worth more than $90 million.

IU’s deal with Adidas “is the fifth-largest-known such agreement in college athletics,” said A.J. Maestas, Navigate Research founder and president.

Glass is confident it won’t be IU’s biggest apparel deal.

“When we get better in football, and I believe our future is very bright, our next deal could be better than this,” Glass said. “That’s certainly what I’m anticipating.”
 

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