UNC, Nike Sign New 10-Year Contract

The University and Nike Inc. have signed a new 10-year contract for Nike to be the exclusive supplier of athletic footwear, apparel and accessory products to the Tar Heels.

UNC and Nike signed the contract in late May, according to a news release dated July 1. It took effect retroactive to July 1, 2008. It is valued at $37.7 million, according to news reports.

“The University of North Carolina is proud of its long-standing relationship with Nike,” said Athletics Director Dick Baddour ’66. “This partnership has benefited all 28 varsity sports and provided millions of dollars for academics and student scholarships at the University.”

Nike will provide the athletics department with shoes, uniforms, coaching gear, balls and other equipment.

“It’s important in these challenging economic times to put your athletic department on better financial footing, and this contract lessens and hopefully eliminates the need for our programs to purchase those items from their operating budgets,” Baddour said. “A key part of the new contract is an increase in the amount of product our programs can order.”

In addition to the apparel and equipment, which constitutes the majority of the value of the contract, Nike will give UNC $2 million to the Chancellor’s Academic Enhancement Fund. Chancellor Holden Thorp ’86 said he would direct the funds to faculty support.

Nike also will provide support for team tours, travel and hosting regular-season tournaments in several sports. The athletics department also will receive $1 million for signing the contract, with those funds being used to overhaul lighting and sound at the Smith Center.

In the new agreement, Nike will continue to provide resources for an academic and athletics excellence fund. The fund, added in 2001, helps fund bonus payments to coaches based on achievements by their respective student-athletes in the classroom and in athletics competition.

Nike also has entered into individual contracts with each of UNC’s head coaches, consistent with NCAA regulations and University policy. Nike will provide annual summer internships for two students to honor the memory of Rutledge Tufts, former UNC licensing director who was instrumental in crafting fair labor practice standards, and former student body President Eve Carson ’08. Tufts died in May 2006, and Carson was killed in March 2008.

Nike, UNC’s top licensee of retail merchandise, will pay the University a premium royalty on the sale of merchandise carrying Carolina logos. The rate exceeds the University’s standard royalty rate.

Nike has the exclusive right to manufacture Carolina jerseys, including authentic, replica, vintage/throwback and fashion jerseys for baseball, basketball, football, lacrosse and soccer. These rights do not include youth and infant/toddler jerseys. UNC and Nike recognize the desire among fans for a variety of merchandise. Therefore, the new agreement allows for a special distribution strategy for the local market. In addition, Knights Apparel will manufacture UNC jerseys for sale in retail channels not covered by Nike. Together, these provisions will allow UNC jerseys to be available for sale by local area retailers.

UNC and Nike have affirmed their commitment to fair labor practices, a commitment that set an industry standard when adopted in the 2001 agreement. Nike has agreed to continue to produce licensed products and provide products made in factories under fair working conditions and to operate consistent with the labor standards in UNC’s license agreements and in Nike’s code of conduct. UNC and Nike also have agreed to promote the ideals of human rights and social and environmental protections.

“We are proud that Nike recognizes and shares the University’s commitment to values, integrity and excellence,” Baddour said. “Both UNC and Nike remain dedicated to the high quality of labor standards stated in our previous agreements, which are affirmed in this contract.”

“The new contract with Nike will enhance scholarship assistance available to our students through the revenues generated by the trademark licensing program and sales at Student Stores,” said Derek Lochbaum, director of trademark licensing. “The overall agreement positions the University to remain a leader in the industry.”

Teams, coaches and staff will use Nike-provided products exclusively for official games, practices and clinics. Nike receives tickets and parking passes to home games and postseason tournaments, full-color sponsorships in football and men’s basketball game programs, acknowledgement in media guides, schedule cards, public address announcements and, the athletics department’s Web site. Nike also has the right to use UNC marks to advertise its product, subject to University approval.

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