A big component of the argument surrounding the way colleges and universities treat their student-athletes is based on the amount of money big-time college football programs collect for their schools. Programs take in money by the millions, often propping up the rest of a school’s athletic department. But how does that money come into the program and where does it go?
Recently, our sister publication in Portland ran an exhaustive look at how apparel companies fit into this equation. What staff reporter Matt Kish found was a system that “raises serious questions about ethics, possible conflicts of interests and the increasing influence of money on college campuses.” The Portland Business Journal also published a database of every apparel contract they were given after a public records request. Three high-profile football programs tied to the D.C.-area — the University of Maryland, University of Virginia and Virginia Tech University — submitted apparel contracts to Portland’s database. We decided to take a deep dive into those deals, which show only a fraction of how much money goes into university athletic programs.
Anyone who casually follows Maryland athletics knows that Under Armour outfits the team. CEO and founder Kevin Plank is a Maryland alum, but the company pays at least two other schools — the University of South Carolina and 2013 BCS championship participant Auburn University — more than it pays Maryland.
Under the deal, Under Armour Inc. supplies Maryland with $1.9 million in equipment and apparel, along with $1.475 million in cash.
Each of these contracts comes with a number of performance bonus perks. For instance, Under Armour will pay Maryland $10,000 for every bowl game the team is invited to, with the dollar amount increasing to $50,000 if that game is a BCS bowl game (although that stipulation may be tweaked with the BCS ending this year) and $200,000 if the Terps win the national championship. There are also bonuses tied to winning the ACC championship and if the Terps’ football coach is named coach of the year.
There are also a number of bonuses tied to championships for men’s and women’s basketball, baseball, lacrosse, soccer, field hockey and softball.
The contract acquired by the Portland Business Journal was set to expire on Dec. 31, 2013. Last week, Maryland and Under Armour extended the contract for another decade. We were unable to receive a copy of the new agreement by the time this article was posted.
Maryland’s closest conference competitors — the University of Virginia and Virginia Tech University — have similarly lucrative deals with Nike Inc.
Nike gives Virginia $1.3 million in equipment and apparel, $200,000 in cash and a $75,000 discretionary apparel allowance that is used by coaching and athletic staffs. Also, Nike gives a cumulative bonus to the school based on postseason appearances by football, men’s and women’s basketball, men’s and women’s soccer and men’s lacrosse.
Virginia Tech has a similar deal with Nike, with the company giving the school $1 million in equipment and apparel and $275,000 in cash. A good portion of that cash allowance is given directly to head football coach Frank Beamer. Since 2007 — and until the end of 2015 — Beamer gets $150,000 of Nike’s yearly payment. If Beamer no longer coaches the team, Nike has the option of decreasing the cash payment by up to $75,000, with the remaining payments going straight to the university.
Another interesting wrinkle in Virginia Tech’s contract is the absence of performance bonuses for the football program. Maryland and Virginia have bonuses tied to conference championships and BCS bowl appearances, but neither school has accomplished those feats under the current contracts. Under Virginia Tech’s latest contract, the Hokies have won the ACC twice and played in four BCS bowl games.
Virginia Tech does have performance bonuses tied to the men’s and women’s basketball team, earning the school up to $25,000 for a men’s Final Four appearance and $10,000 for a women’s final four appearance.
Other interesting facts:
— The apparel companies are often hooked up with prime tickets for home and away athletic events. Below is what each company gets from each school.
Maryland (Under Armour):
- 20 Terrapin Club season tickets for all Maryland home football games
- 10 Terrapin Club tickets for all away games
- 10 Terrapin Club tickets for any post-season games
- 100 tickets to one specific home football game
- 10 lower-level tickets for every home men’s and women’s basketball game
- 8 tickets for any post-season men’s or women’s basketball game
- 10 tickets for any other Maryland team’s regular season home games
- 10 tickets for other Maryland team’s postseason games
- 4 VIP tickets and 2 sideline passes to every home football game or 50 tickets to one mutually agreed-upon home game
- 10 tickets to bowl games
- 6 tickets to women’s soccer home games
- 6 tickets to women’s soccer postseason games
- 5 tickets to every women’s basketball home game or 10 tickets to one mutually agreed-upon home game
- 5 tickets to every women’s postseason basketball game
© 2014 American City Business Journals, Inc.