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This year is one of big changes for the University of Colorado Buffaloes football team. Heisman Trophy-winning tailback Rashaan Salaam is gone. The team has a new coach for the first time in a decade. And, starting with the game against Colorado State University four weeks ago, each player began wearing a small Nike logo on his left collarbone.
Guess which change is worth more than the others.
But the university isn't sure it wants anyone to know about it. Last week CU apparently signed a lucrative multiyear deal with the Oregon athletic-apparel company. At least that's what Nike's chief competitor for the endorsement deal says. "We got a letter from their purchasing department saying they signed a five-year deal with Nike," says Doug Trautman, director of collegiate and team sports for Reebok Inc.
But officials for CU continue to deny that a long-term deal has been struck. The university has stalled a reporter's request for a public document in which CU solicited bids for a new endorsement deal. And though athletic director Bill Marolt admits that the university has been negotiating with Reebok and Nike, he says the only decision he has made has been to extend for one year an earlier contract with Nike.
The university's hesitation to release information about any deal with Nike is especially noteworthy considering that CU's relationship with the company already has affected the national perception of Colorado's largest university. Ever since every member of the Buff's football team began wearing prominent Nike swoosh logos on his nationally televised uniform, it has become clear to whom CU owes its corporate allegiance.
Consider which team was the most visible during a recent showpiece CU football game. It wasn't third-ranked Texas A&M, whose Heisman-hopeful running back, Leeland McElroy, gained a paltry 52 yards. It wasn't even the seventh-ranked Buffs, whose top-ranked quarterback, Koy Detmer, was knocked out of the game in the second quarter.
Rather, it was Team Nike. Going into the game, Nike's director of public relations, Keith Peters, was ecstatic. "This Saturday there'll be a whole lot of swooshes on the field," he gloated. That was an understatement.
Every Aggie and every Buff wore Nike shoes, of course. They also wore uniforms with Nike's trademark swoosh emblazoned on the left collarbone so as to be more easily picked up by the television cameras. Even Coach Rick Neuheisel's traditional black-and-gold Colorado Buffaloes cap had been replaced by a new hat boasting the logo.
If Reebok's rejected bid and deals Nike has already struck with other major universities are taken as guidelines, Colorado's new contract with Nike is probably worth seven figures.
"We thought we put in a solid bid," says Trautman. The Massachusetts-based athletic company offered CU a five-year pact, with options to extend it.
He adds that, per CU's wishes, Reebok broke its bid down into three parts: the cash it would give to the university, the amount of money it would spend to market CU's name, and the value of equipment it would give Colorado. Trautman says that the value of the cash and equipment made up most of the total package, with the marketing money having the least value.
In return, of course, Reebok would have received (and Nike will receive) a lot of exposure for the company's name. In addition to the omnipresent swoosh covering players and coaches, Trautman says CU was offering to exchange sign space for the company's name and logo on various Buffalo athletic venues and mention of the product on coaches' television and radio shows.
Lucrative alliances between athletic companies and high-profile universities are nothing new, and Colorado has been no exception. "We've had an ongoing relationship with Nike," explains Marolt. Specifically, Nike has struck deals with individual teams within the university, including women's volleyball and men's basketball.
Not surprisingly, though, the company's most enthusiastic support has been reserved for Colorado's nationally ranked--and, more important, nationally recognized--football team. The athletic company has provided shoes and sideline apparel for the football Buffs for about ten years.
Former coach Bill McCartney enjoyed a reported $50,000 to $75,000 annual stipend from Nike to supplement his $140,000 yearly salary. (McCartney also received incentives for postseason games.) According to Marolt, Neuheisel, who earns $11,000 a month from CU (not counting his postseason incentives), will receive approximately the same amount of money from Nike this year.
Despite Nike's generosity to McCartney and Neuheisel, CU's football coaches receive pocket change compared to the stipends the company gives to other high-profile coaches. Two years ago, for instance, Mike Krzyzewski, the highly successful coach of Duke University's basketball team--and a longtime Adidas endorser--agreed to a deal in which Nike reportedly paid him a million-dollar signing bonus, an annual stipend worth up to $400,000, and Nike stock options.
But in recent years, such deals--in which successful coaches alone trade lucratively on a university's good name--have begun to raise hackles. So the major athletic companies that compete for college sports exposure have begun to shift their strategy to "total university relationships."
The new deals work like block grants. Nike, say, delivers money to the university, whose athletic directors then distribute it as they see fit. Explains Nike's Peters, "Over the past few years we have begun to work with athletic departments in toto, rather than the old arrangements we made with individual programs."