Baltimore-based apparel manufacturer Under Armour has canceled its sponsorship agreement with the University of Cincinnati in a move intended to save the company money as it struggles with losses amid the pandemic.
The $50 million Cincinnati deal will be bought out by Under Armour, under an agreement where the company will pay $9.75 million as an exit fee, and supply the Bearcats with $3.65 million worth of product, according to the Baltimore Business Journal. It’s the latest in a series of cost-cutting moves, including the company ending its $280 million deal with UCLA, canceling an agreement with Cal and renegotiating contracts it has with athlete endorsers.
“We are still an Under Armour school, powered by innovation with a great partner,” Cincinnati AD John Cunningham said in a statement. “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."
The Bearcats will continue to wear Under Armour gear throughout the season, and likely into the future under a “product supply” agreement. The school may purchase Under Armour equipment through distributor BSN Sports, receiving the equipment at wholesale prices.
The company will continue to pay the school performance bonuses under the terms of the product supply agreement. If the team appears in a bowl game, the company will pay them $10,000. A College Football Playoff appearance nets $25,000. Winning the national championship would pay $100,000.
The men’s and women’s basketball teams can net $100,000 by making it to the NCAA tournament, and other teams are eligible for smaller bonuses, as well.
The split with Cincinnati appears to be much more amicable than Under Armour’s arrangement with UCLA. That split has led to a legal battle, with UCLA seeking $200 million in damages for a breach of contract.