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South Bend Tribune (Indiana)
Kevin Allen, South Bend Tribune

Kevin Plank has clear memories of his first visit to the University of Notre Dame.

It was early September of 1997, just a year after he'd started a sports apparel company in his grandmother's basement in Washington, D.C., and he'd driven his Ford Explorer with a cracked windshield to South Bend to see Georgia Tech wear his Under Armour gear while playing the Fighting Irish.

Under Armour's revenue had grown from $17,000 in its first year to $110,000 in its second year, but Plank still couldn't afford a hotel room here on a football weekend.

So, he slept in the visiting team's locker room.

On Tuesday - in the kind of twist reserved for only-in-America stories - Plank was back at Notre Dame to ink what he and university officials called the most lucrative equipment contract in the history of college sports.

"This is a pinch-me moment, without question," said Plank, who wore a navy blue suit and gold tie for the news conference at the Guglielmino Athletics Complex.

The deal between Notre Dame and Under Armour has captured national attention in sports and business circles ever since rumors began swirling about it two weeks ago. It pairs one of the most enduring brands in college sports with a young company that's become a rising star in the apparel industry.

Under Armour will be the exclusive outfitter for all 26 of Notre Dame's varsity sports teams. The 10-year contract will take effect July 1 after the university's agreement with Adidas expires.

Notre Dame officials didn't disclose financial terms of the deal, but Athletic Director Jack Swarbrick said it's the largest sponsorship any school has landed in terms of both cash and merchandise. It includes the option for Notre Dame to take some of the cash component in Under Armour stock.

"Notre Dame is rich in tradition. What we are not as rich in is an entrepreneurial culture," he said. "For us to marry our tradition with one of the great entrepreneurial stories in recent time in this country is exciting for me."

Plank, a former University of Maryland football player, founded Under Armour in 1996 with the goal of making a moisture-wicking T-shirt that provided compression to keep athletes more comfortable. The Baltimore-based company's product line includes clothing, footwear and other types of sports equipment.

Swarbrick said one of the appealing aspects of Under Armour is the company never lost touch with its roots in sports technology. "We want Notre Dame, our coaches and our student-athletes to be an Under Armour laboratory - a proving ground for new technologies," he said.

Plank called the affiliation with Notre Dame "a game-changing event for our company."

The stock market agreed Tuesday that it was a good move. Under Armour stock rose 3.4 percent to $84.78 per share.

Sam Poser, a senior research analyst who follows footwear and apparel for brokerage firm Sterne Agee, said the connection with Notre Dame will elevate Under Armour's brand.

"You're going to see Under Armour in places you never saw it before because Notre Dame is a school that gets a lot of press," he said. "This is a very logical step for them to take."

Under Armour is the outfitter for a dozen other universities that have Division I football programs, including Auburn, Boston College, Maryland, Northwestern and South Carolina. Notre Dame is the highest-value sports program to sign with the company.

Although the deal's financial numbers weren't available, other school's publicly released agreements provide an idea of how much Notre Dame will receive.

Michigan has the richest equipment deal that's been publicly detailed. The Wolverines receive $8.2 million annually in equipment and cash under an eight-year contract with Adidas.

The Motley Fool, the financial media company, estimated last week that Notre Dame would be able to land $100 million if the university agreed to an 11- or 12-year deal. ESPN reported Tuesday that anonymous sources said the 10-year deal is worth about $90 million.

Adidas has been Notre Dame's official outfitter since 1997. The university entered into a 10-year, $60 million contract with the company in 2005.

Plank and Swarbrick said the equity option in Notre Dame's contract is unique in college sports. Under Armour has offered stock to professional athletes, such as New England Patriots quarterback Tom Brady.

"I want them rooting for the company and not because of some transactional endorsement, monetary number," Plank explained. "I want them to be a part of it and part of building something great."

And Under Armour has been satisfying its shareholders.

Plank said the company's top and bottom lines have grown at an average annual rate of 31 percent since it went public eight years ago. Its revenue for 2013 was expected to reach about $2.2 billion - that's less than one-tenth of Nike's annual revenue, but Nike isn't growing as quickly.

Swarbrick told The Tribune after the news conference that he approached the end of the Adidas contract with all options on the table.

"I really wanted to get to the market with a full opportunity for anybody to come forward and be our partner. I didn't go into it with a front-runner," he said. "We had no dissatisfaction with Adidas. They've been a great partner, and we've enjoyed working with them."

Plank said he met with Swarbrick for the first time in early December.

"Under Armour distinguished themselves pretty quickly in that process," Swarbrick said.

KAllen@SBTinfo.com 574-235-6244 Twitter: @KevinAllenSBT

ND-Under Armour deal

* Under Armour will be the exclusive outfitter for Notre Dame's 26 sports teams, replacing Adidas.

* Contract runs 10 years and takes effect July 1.

* Richest equipment contract in the history of college sports.

* Estimates say the deal could be worth $90 million to $100 million.

* "A game-changing event for our company."

- Under Armour founder Kevin Plank

* "We want Notre Dame ... to be an Under Armour laboratory, a proving ground for new technologies."

- Athletic Director Jack Swarbrick

 

January 23, 2014

 

 
 

 

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