BERKELEY -- When was the last time that Phil Knight came to the California campus, as a NIKE representative, instead of for a Cal-Oregon football game? He hasn't, according to sources in Cal Athletics. On Thursday, Under Armour CEO and founder Kevin Plank and a contingent of nine other Under Armour dignitaries announced -- in person -- the new 10-year, $86 million gear and apparel deal with the Golden Bears. It was a day, Plank said, two and a half years in the making.
"It's really wonderful to be here," Plank said. "There are 14,000 strong that make up our great brand, and I can tell you, at our offices all over the world, they are all wearing blue and gold Cal t-shirts right now."
http://www.scout.com/college/california/story/1663261-cal-signs-deal-und...At the end of the exclusive negotiating window with NIKE, Williams said, Cal took a step back, and think about what it was that Cal wanted to do, how the athletic department would move forward. Their old deal got them just $150,000 a year in cash, and $2 million in product. It was paltry, by the standard of every other Power Five school. Cal was 37th at best, in terms of apparel and gear deals, and 60th, at worst. For NIKE, Cal was an afterthought.
For Under Armour, Cal was a beachhead, and they were bringing every tank, fighter jet and bomber they had. Simply put: For Nike, Cal was an afterthought. For Under Armour, the Bears are not only a priority; they're the priority.
The actual negotiations took five "very intense" months, but the deal has far-reaching implications, not the least of which is the mountains of extra gear that Cal athletes will get, across all sports. Additionally, the cash involved in the deal -- a $3 million up-front signing bonus and $3.5 million per year starting on July 1, 2017 -- will help to defray the athletic department's budget deficit, which, last year, was $9 million, and the $9 million in athletic revenue was wiped out by that, and the $18 million debt service on California Memorial Stadium.
"Not only will it make us better at the things we do today, the things we're doing in athletics, but I think what it's really going to do is put us in position to do things that we're not even imaging, today," said athletic director Mike Williams. "There are, obviously, good financial benefits to this, and it will help us close the gap between our revenues and expenses. It's one of a number of initiatives we'll be announcing over the next few weeks that will get us to that place."
Innovation, a West Coast Flagship
The "landmark partnership," could, some sources say, go some distance toward unifying the brand schism that separates 'UC Berkeley' from 'Cal' in the eyes of the general public, but plans in regard to that ambition are still being discussed.
"We've seen that they listen," Williams said. "Their attention to detail is extraordinary, and they have proven to us that they understand Cal, they understand our campus, and they understand our students."
“Cal’s a powerful place," Plank said. "It’s the home of many All-Americans, many first-round picks, as well as many Nobel Laureates. These are things that are incredibly compelling and attractive to us."
Part of that power lies in innovation, in being at the bleeding edge in a wide range of fields. That was one of the reasons, Plank said, that he wanted this deal with Cal, so badly.
"One of the challenges that I give my team every day, isn't the concern we have of someone we may view or others may view as one of our competition today, coming out with a new knit-constructed upper in a shoe," Plank said. "That's not innovation. The fact that we still make a shirt and a shoe the exact same way that we did 80 years ago, I find to be not very flattering to those that have been in our industry. When I think about real innovation, I press my teams, every time we kick off a product season, with: What are you going to do, when Apple decides they're going to make shirts and shoes? More importantly, what does it look like, and what does it do? Whether we get there first or we get there first, or whoever else is out there, the way we're thinking about attacking innovation, of doing it on behalf of our consumer, on behalf of our athletes, giving them the tools to truly make them better, the way we think about innovation is we expect to change the game."
Plank spoke of setting up a "beachhead" in the Bay Area, in the state of California, specifically, in San Francisco, with Cal being the West Coast flagship university for Under Armour, and that has as much to do with Cal as it does Under Armour's ambitions.
"We're sitting in the world's fifth-largest economy," Plank said. "The United States of California is something that we are hyper-aware of. We have amazing assets, frankly, already, right here, when you think of MyFitnessPal (based in San Francisco) and the leaders of the company that we purchased last March in Mike and Albert Lee that run that aspect of our fitness business in San Francisco, all the way to assets we have like a baseball player named Buster Posey -- who's a pretty good athlete -- and that basketball player, oh, Stephen Curry. We are going to be in the Bay Area in a big way, and this was meaningful for us to be here."
Not only will there be a retail presence and headquarters in San Francisco, but there will be a permanent retail space somewhere on campus, as well, with Memorial Stadium being looked at as one of several options. Sonny Dykes walked around the stadium and the football facilities with Plank during his stay in Berkeley, and Plank said he saw "opportunities to brand." He repeatedly said that Cal can use Under Armour as "an extension, as your in-house marketing department," helping creative teams already on campus. Re-branding, and pro-actively branding elements that had not been thought of, or considered, before, is what Under Armour will consume itself with during the length of the partnership.
"San Francisco is certainly a region for us that I'm vey excited about locking down, with the largest flag being this great institution at the heart and soul of it. This is really a critical piece of anchoring what we have with Buster, what we have with Stephen, and what we now have with Cal." -- Kevin Plank, Under Armour CEO and Founder
Recruiting, Jordan Brand and Steph Curry
"Our intent," Plank said, "is to over-deliver across the board. This is not where we do a one-year branding exercise and it's forgotten. Our job is to help our coaches recruit great talent here. That's a pro-active, ongoing thing that needs to happen every season. Our job, as we have this great view on the market, we should be bringing that view back here, and over-delivering for the University and for the coaches."
The athletic department-wide re-branding that happened in 2013 -- with the introduction of a unified typeface and a new logo -- is not unlike the process that Nike has undergone with Arizona State, Oregon State and Washington State. Out of the four schools, only one -- Oregon State -- is continuing with Nike. Looking at the specialized fonts that Nike purports to represent each campus, it's impossible not to see that Cal's is almost identical to Washington State's, which, itself, is very similar to that of the Sun Devils, and even what Nike did for the Minnesota Vikings.
"We're very much about the athletes first, and we've seen from Kevin's team that they are insistent, they are reliable and they are relentless in the pursuit of excellence."
Plank, who said he and Under Armour have been "on Cal" for more than two years, likened his company's pursuit of the Bears to that of Steph Curry.
"That relationship is so special. He's such a special human being," Plank said. "One of the things that's kind of neat, about when we ultimately signed Stephen Curry, it wasn't the fact that we went out and said, 'Steph, we'll make great shoes for you; we should be your partner.' We signed the athlete who was in the locker next to him, and we over-serviced and over-delivered everything for them, until finally, he said, 'Huh, these guys are pretty good.' We've been all over this deal, anybody who looks, talks, thinks, graduated, winked, walked that Cal walk and talked that Cal talk, is someone we've been working through to get this. Everything matters."
The fact that Cal will be dropping Nike -- and therefore the Jordan Brand -- from its basketball programs has concerned fans, particularly when it comes to recruiting, but having Curry as a potential asset certainly is intriguing.
"Cuonzo [Martin] and Lindsay [Gottlieb] see that we have a real opportunity here," Williams said. "Cuonzo and Lindsay are excited to be working with Under Armour in that process."
Will Cal basketball now be outfitted in Steph Curry-branded gear?
"Part of it, we'll continue to find that, but as part of the deal, there are things where Stephen being here is obviously something where Stephen has an allegiance already, since Steph went to Davidson," Plank said. "But, he needs a hometown school, as well, so we'll work where that line is appropriate, in the right place to go, but without question, I think our intentions for Stephen Curry are to build a legacy for him that is second to no one else who's ever played this sport, so I think Cal will be a very important part, and will help to define what that means."
Reading between the lines: Under Armour is building its basketball brand, and with Curry at the forefront, Cal is next in line, and is the next logical step for the company. Yes, it means giving up the Jordan Brand and Cal's notoriety as the only Jordan school on the West Coast, but it also means taking the same leap of faith that Curry did when he initially signed with Under Armour.
"As a company, as a brand, we don't look at the tracks of what others have done and say, 'That's what we're going to do,'" Plank said. "We look at the tracks, we gain experience from it, and it informs the decisions that we ultimately make. We're lucky to have the views that we do, and I think we can make a pretty great decision, but [outfitting Cal in Curry gear] is a good idea."
When Williams and Under Armour addressed the student-athletes, looking cool was just as much a factor as quality.
"It was across the gamut," Williams said. "The coaches really wanted a partner that listened, and a partner that was responsive."
Reading between the lines, and judging by what multiple sources have said, Nike has foisted upon Cal many looks and styles, without much deference to the input of coaches and student-athletes, and not much room for suggestion and creativity, either.
"Kevin and his team really listen," Williams said. "Kids are kids. I have a 14-year old, and I know what's trendy with teenagers, these days, and we were not looking for something that was trendy. We were looking for what would make sense in a partnership that was going to last for 10 years. Students, student-athletes, coaches have all been involved in this process from Day One, and we're hearing from our coaches that they're real enthusiastic with the direction that we're going."
Branding and History
"This is where I get the Maryland football uniform question," Plank said, when asked about the somewhat more traditional fanbase that is protective of its old and established marks and identities -- the script Cal, the Block C, and so on.
The question touched on a sore spot, sources say, for Cal football, which, for four years, has tried to get Nike to revive the Joe Roth throwback uniforms, only to be turned down, repeatedly. That's not going to happen with Under Armour.
"Every University has its own personality, and our job is to explore and discover that personality," Plank said, echoing some of the same words that Nike's design team used to describe the re-tread font that was presented in 2013. "We will bring that out through the expression of uniforms. I probably would say the University of Notre Dame is a better example: The University of Notre Dame doesn't need loud and brash and things like that. Our job is to be of service to the coaches and to answer what the student-athletes want, but also to be respectful of the tradition, respectful of the heritage that comes with established alumni bases, as well. We'll leave that up to the coaches and the designers.
"Our job is to push, but our job is to anticipate the needs of the coaches, and that, if they are looking for something, we have a few special ideas already. We have a few special uniforms, already. I can tell you the approach we're taking with some of those special uniforms are more about celebrating the past than they are about creating something new. 'Look at me,' is not the best definition of 'What is Cal?'"
Plank said, "If you want to go crazy, we can go crazy, but that is not our intent."
Above all, Plank said, there needs to be a brand standard.
"We want to extract things that are natural and organic to the Cal brand, that we can bring out and really celebrate," he said.
A Comprehensive Deal
“We have some great brands of schools that we’ve been a part of, and somebody asked the question yesterday: You’ve got Northwestern, you’ve signed Notre Dame, you’ve got Cal and you’ve got Yale, what’s going on? I’m like, ‘We’re building a rocket ship, is what we’re doing,’ and we’re going to need lots of rocket scientists to do that.” -- Kevin Plank, Under Armour CEO and Founder
Under Armour will offer internships to Cal students, and full-time jobs to graduates, and they will not only have an on-campus presence, but a San Francisco headquarters where their new rocket scientists will be working.
"Can we guarantee to hire five people a year from Cal? I'm like, 'You think we can get five Cal people?'" Plank said. "Yeah, we want them all. We want them all."
“I don't want to under-emphasize how important the smarts of the students here, are. I’ve been on record before, saying that one of the issues that I believe that we have in athletics or in sporting goods, in general, is I don’t think we’ve attracted enough smart people to work on the problems that we have. You look at things, whether it’s what we face with the sport of football, and concussions, and the fact that, when you look at the helmet manufacturers out there, there’s a dozen, a couple dozen engineers working against this issue. It’s the kind of thing I look at, and say, ‘I’ve been to the Consumer Electronic Show, and I’ve seen brands like Sony and Samsung and Apple, etc., and you’re talking about hundreds of thousands, millions of engineers working on things like flat screen television or making our phone smaller.’ What if we had smarter people working on our issues? What if we could really attract and make that a component of what we do? What if we truly have rocket scientists working on things like the concussion issue? I wonder how great we could do that.” -- Kevin Plank
Under Armour has offered to sponsor Cal Day, Faculty and Staff Appreciation Day, and other on-campus events.
"I’ve tried to establish something, back at our headquarters and with our partnership with the University of Maryland, called Cupid’s Cup, where we give away over $100,000 in prizes to entrepreneurs and incentivizing, and really celebrating entrepreneurship and what it means," Plank said. "One of the things that’s part of the deal is that we move the competition out here three times over the next eight years.”
Coaches, student-athletes, and students, faculty, administrators were all involved in the process, and, beyond the outfitting of all 34 club teams, the Under Armour deal is a comprehensive one, which includes a 40% discounts on Under Armour product for students, faculty and staff, through their departments.
"As part of the deal, the campus departments are going to get 40% off Under Armour apparel, and the University partnership program is going to work to set up a portal, and part of it is that student groups asked us to help them figure out a way where they could order apparel for their events, so we're going to be working on a process where they can order them through the departments, and that's a part of the University partnership," said campus director of communications, Carole Love. "It's something that was really important to us, as we try to do that, campus-wide partnership."
Under Armour will be designing footwear, apparel and equipment for most of -- if not all -- of the 30 men's and women's varsity teams, as well as the 34 school-recognized club teams, as well as intramural teams.
Yes, Cal will have its fourth different football uniform set in the past 13 years. Yes, Cal is giving up the Jordan Brand. It's a gamble, but given the unique nature of the deal, the ample financial assistance that helps move the department and the University towards more solvency, the potential to partner with the likes of Curry -- and, if you read between the lines, it's certainly evident that's being considered -- and the opportunities for a sport like baseball, where Under Armour is producing a very strong line that's drawn rave reviews (including that of former Cal catcher and Philadelphia Phillies farmhand Andrew Knapp), the deal certainly makes Cal Athletics stronger, on the whole.