University of Kansas

KU Athletics, undeterred by FBI probe, signs lucrative contract extension with Adidas

The University of Kansas athletic department has extended its apparel and sponsorship contract with Adidas — a decision that will be lucrative while also potentially controversial.

The 14-year renewal, which includes the last two years and runs through the 2030-31 school year, is worth $14 million annually and about $196 million total. KU first partnered with Adidas in 2005, signing an eight-year agreement. The pact was renewed 2013 with a six-year extension.

Compared to the six-year extension, Adidas will pay the KU athletic department an average of $3.86 million more per year in base compensation ($1.68 million vs. $5.54 million per year), $4.12 million more per year in product allowance ($2.38 million vs. $6.5 million), and about $800,000 more per year for marketing.

“Both we and Adidas have done our due diligence and thoroughly evaluated all factors related to this partnership, including the current environment related to college basketball,” KU chancellor Douglas Girod said. “We are confident about this renewed partnership and look forward to continuing our relationship with Adidas.”

KU’s agreement comes after some question about whether the two sides should still work together. Previous KU athletic director Sheahon Zenger originally announced a proposed re-up with Adidas for 14 years and $191 million of sponsorship and apparel in September 2017, though those plans were put on hold by new athletic director Jeff Long following the FBI’s investigation into Adidas and its involvement with steering basketball recruits to schools it sponsors.

Specifically, former Adidas employee T.J. Gassnola testified in federal court last October that he made concealed payments on behalf of the company to the families of KU basketball players Billy Preston and Silvio De Sousa. As a result of that trial, De Sousa was given a two-year NCAA suspension — KU appealed the ruling this week — and the athletic department is expecting to face an upcoming NCAA investigation to determine whether the program committed NCAA rules violations.

“T.J. Gassnola was an employee of Adidas. He had an agreement with Adidas that put him in contact with our program,” Long said. “ ... We’ve spent months and months and (had) exhaustive conversations about going forward and how we will handle these things in the future and arrived at the conclusion that Adidas is committed like Kansas is to make sure that we abide by NCAA rules and certainly the law of the land.”

Long was asked Wednesday what his message was for KU fans who felt the Jayhawks should have moved on from Adidas.

“I hope those who have those questions in their mind know that Chancellor Girod and I and our staffs did a very thorough vetting of Adidas and what they were offering us,” Long said. “After extensive conversations and commitments and meetings, we arrived at the decision this was the best partnership for Kansas Athletics and the University of Kansas going forward. We’re excited about this agreement. We believe it’s one that benefits both athletics and academics.”

According to the contract, the $196 million value consists of about $91.5 million in product allowance, $77.6 million in base compensation, $14.2 million for marketing, $7.5 million for a scholarship fund, about $4.5 million in minimum royalty payments and $1.15 million for facility improvements.

The contract states KU has already been paid $1.775 million in compensation for 2017-18, which was the amount under the previous six-year agreement, and $450,000 for this current school year.

One other quirk: KU will get a significant flow of cash immediately, receiving $11 million annually in base compensation from Adidas in each of the next two years before that number drops significantly to $4.05 million in 2021-22. Long said those figures were left in from the original contract proposal between KU and Adidas in 2017 — a time when Zenger likely desired some cash up front to help with facility renovations.

Long said Wednesday that KU “went through all the options that were available to us, explored everything” as it related to potentially looking at other apparel companies while deliberating a renewal with Adidas.

“Adidas was the best option for us moving forward,” Long said. “As you know, we’ve had a long relationship with them dating back to 2005, then a subsequent extension in the 2013 year. It’s been a long partnership, but any time you enter into something like this, you do your due diligence. And we did check out all of those who were interested in the University of Kansas.”

Long said he did not know where KU’s new deal ranked among the richest apparel contracts in college sports, but recent reports would indicate it is among the best. In 2016, The New York Times reported that UCLA’s apparel contract with Under Armour was the largest in the country at $18.7 million annually, followed by Texas ($16.8 million, Nike), Ohio State ($16.7 million, Nike) and Michigan ($15.8 million)

KU’s $14 million per year total, then, would compare favorably to the highest apparel payouts in college athletics.

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