Under Armour Reportedly Trying to Terminate Record $280M Contract with UCLAJune 27, 2020
Under Armour has reportedly informed UCLA that it is trying to terminate its $280 million apparel deal with the school.
According to Ben Bolch of the Los Angeles Times, UCLA athletic director Dan Guerrero addressed the situation in an email to his constituents, writing: "We are exploring all of our options to resist Under Armour's actions."
UCLA and Under Armour agreed to a 15-year, $280 million deal in 2017, which was the largest shoe and apparel financial package in college sports. At the time, UCLA received a $15 million signing bonus as well.
Under Armour's attempt to back out of the deal isn't the first time it has retreated in recent years. The company agreed to a deal with Major League Baseball in 2016 that would have seen it become the supplier of on-field jerseys beginning in 2020.
The deal fell apart, however, and Nike swooped in to become MLB's jersey supplier instead.
Under Armour was once the toast of the sports apparel industry, but it has fallen off in recent years. In February, Under Armour reported worse-than-expected numbers for the fourth quarter of 2019, which caused stock to drop considerably.
If the Under Armour deal does go by the wayside, it will be a major blow to a UCLA athletic department that is struggling financially as well.
In January, Jon Wilner of the Mercury News reported that UCLA athletics had an $18.9 million deficit in the 2019 fiscal year and required a bailout.
UCLA has long been considered an elite college athletics program, but that hasn't been the case during the Under Armour deal thus far.
The Bruins football team has suffered through four losing seasons in a row, including two under current head coach Chip Kelly. UCLA went just 4-8 last season and hasn't won double-digit games since 2014.
The men's basketball team, which has won an NCAA record 11 national titles, has not won a national championship since 1995. The team lost in the First Four of the NCAA tournament in 2018 and failed to qualify for the tourney in 2019 with a 17-16 record.
With Under Armour struggling financially and UCLA failing to deliver quality results, the $280 million deal has seemingly become expendable for the apparel company.