On Saturday afternoon, the University of Cincinnati football team survived a late scare against unranked Tulsa to keep its magical season on track.
The Bearcats are now 9-0 and ranked No. 2 in the AP Poll, with an unprecedented College Football Playoff berth in reach. ESPN’s popular College GameDay show was on campus for the first time, alongside a sold out crowd of more than 37,000.
It’s the type of season that shoe companies have historically paid big bucks to be a part of—which, in Cincinnati’s case, makes for a particularly awkward story of college football’s Cinderella and her slipper.
The Bearcats are currently engaged in a dragged out divorce with Under Armour, their apparel partner since 2015. The details are complex but, in short, Cincinnati had one of the largest apparel deals in the country (on par with what Nike gives Alabama), until Under Armour wanted out of the deal. The two reached an amicable separation last year that will pay the school less money, but also keep the Bearcats in Under Armour through 2024.
The move was part of a wider pull-back from Under Armour, which is shifting its marketing away from long-term team deals, particularly with college programs. And it will hurt Cincinnati financially twice—once with the haircut on its current deal, and again as the Bearcats look to negotiate a new long-term partnership in a market that’s virtually collapsed without Under Armour’s participation.
Representatives from both Under Armour and Cincinnati declined to comment on their current situation.
There is, however, a silver lining for the Bearcats. Cincinnati is now in its second straight season as one of the nation’s best football teams, with a legit shot to become the first non-Power Five school to make the College Football Playoff. At some point in the next three years, the Bearcats will join the Big 12 Conference, a league with a higher profile than its current home.
“Cincinnati would still prefer the old deal,” said Nick Carparelli, who negotiated the original one for Under Armour back in 2015. “But given what Under Armour did, if they had to be a free agent, now’s not a bad time.”
It’s hard to understate how Under Armour’s marketing shift has reshaped the market for college apparel deals. In 2015, the high-flying company (NYSE: UAA) believed putting its logo on elite athletes around the country was a great way to sell more sneakers and apparel to weekend warriors. Not only did Under Armour sign massive deals with schools like UCLA and Notre Dame, but it led Nike and Adidas to pay up for schools like Texas and Washington.
As Under Armour’s fortunes shifted—it’s stock price fell 85% from September 2015 to April 2020—so did its feeling about those deals. The company has chosen instead to focus on individual endorsers, including Steph Curry, Tom Brady and Dwayne “The Rock” Johnson, instead of partnerships with teams and leagues.
Last year, Under Armor ended its on-field NFL licensing deal, which is why Brady, the league’s biggest star, competes every Sunday in cleats without logos. Around the time it was negotiating with Cincinnati, the company told UCLA that it was looking to terminate its 15-year, $280 million contract, citing the pandemic as a force majeure trigger. UCLA sued the company, and the legal battle continues.
Meanwhile, Cincinnati, whose apparel agreement didn’t include any force majeure language, took a more amicable posture towards Under Armour. In August 2020, university president Neville Pinto signed a buy-out agreement that ended the apparel deal five years early, with Under Armour agreeing to pay the school $9.75 million (there was $6.05 million in cash and another $14.9 million in product left on the contract).
Three months later, Pinto signed a second, companion agreement with Under Armour. Teased in the original buy-out, that supplier deal gives the school the opportunity to purchase wholesale product from an Under Armour distributor at a discounted rate. It also kept Under Armour as the Bearcats’ exclusive apparel partner through 2024.
Viewed together, the deals let Cincinnati recoup the $6.05 million in cash, plus a chunk of the product allowance. Accounting for the pricing difference between the original deal and the new supply agreement, Cincinnati appears to have lost out on about $7.5 million, while functionally shaving one year off the deal. At the time, the school’s AD John Cunningham called Under Armour “a great partner.”
“We adjusted the terms of our partnership in a manner that was best for both parties given the changes that have occurred in our industry over the past six months,” Cunningham said in a statement.
Cincinnati is free to start negotiating a new deal, which could kick in once the Under Armour supply deal expires in two years. Those talks will certainly center on the school’s recent football success, its move to the Big 12, and its energized fanbase. Fanatics, which runs the Bearcats ecommerce store, says Cincinnati merchandise sales are up 200% this season as compared to two years ago.
Back in 2019, Under Armour compiled an internal rank of football and men’s basketball team brand value. Cincinnati finished No. 45 in the combined rankings (74th in football, 19th in basketball), ahead of seven Big Ten schools and five of its future Big 12 peers.
Which brings us back to Cincinnati’s current paradox: Its football program has never shone so brightly, and yet, at the same time, its next apparel deal will almost certainly be a big step back financially. That’s because Nike and Adidas are no longer competing with a deep-pocketed upstart willing to shell out big money for college partners.
UCLA offers a glimpse at what might be in store for the Bearcats. After suing Under Armour over the termination of its contract, UCLA announced a new six-year deal with Nike’s Jordan brand. That deal pays the Bruins less than half of what Under Armour committed to just five years prior.